Glossary term
Current ratio
Current ratio compares current assets with current liabilities in a simplified liquidity calculation.
Plain meaning
What current ratio means
Current ratio is calculated as current assets divided by current liabilities. It is often used as a quick view of short-term liquidity from balance sheet amounts.
Formula role
How OpenBook uses it
OpenBook's liquidity calculator uses the entered current assets and current liabilities to calculate current ratio. If current liabilities are zero, the ratio cannot be meaningfully calculated and the result is treated as unavailable.
Common boundary
Why classification matters
The ratio depends on how assets and liabilities are classified. The calculator does not audit classifications, adjust for restricted cash, aging of receivables, inventory quality, credit facilities, or industry norms.