What is the current ratio? What does the current ratio mean as a key performance indicator for your company?
The current ratio is a measure that indicates whether your company may face liquidity problems in the short to medium term.
The ratio expresses the number of times you have liquid assets available compared to the amount you owe to your creditors in the short to medium term.
If the current ratio is lower than 1, the continued existence of the company may be at risk within a period of approximately a few months, and it is advisable to take measures, such as seeking additional financing.
