About the Current Ratio Calculator
What is the Current Ratio Calculator?
The current ratio compares what a business will turn into cash within a year with what it must pay within a year. It is the most widely used liquidity ratio.
Enter total current assets and total current liabilities for the ratio, the working capital and a plain-language reading.
How to use the Current Ratio Calculator
- Total Current Assets (₹) (sample: 33,00,000)
- Total Current Liabilities (₹) (sample: 18,00,000)
- Press Calculate Current Ratio (results also refresh as you type). The result card shows the Current Ratio, along with Working capital and Reading.
Formula used
Current ratio = Current assets ÷ Current liabilities
- Current assets = cash, receivables, inventory, short-term investments and prepaid expenses
- Current liabilities = payables, short-term loans, current portion of long-term debt, other dues within a year
Indian banks usually expect at least 1.33 for working capital limits.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Total Current Assets (₹) | 33,00,000 |
| Total Current Liabilities (₹) | 18,00,000 |
| Result | Value |
|---|---|
| Current Ratio | 1.83× |
| Working capital | ₹15,00,000 |
| Reading | Healthy |
Tips for using the Current Ratio Calculator
- A very high ratio can mean idle cash or excess inventory.
- Look at the quick ratio as well if a lot of current assets are inventory.