However, because the current ratio at any one time is just a snapshot, it is usually not a complete representation of a company’s short-term liquidity or longer-term solvency. For example ...

These ratios generally fall within one of four types of measurements: profitability, liquidity, solvency, and valuation. Understanding and applying ratios from all of these categories can enable ...

Ratios of 1 or higher indicate short-term solvency. Because the current ratio compares short-term assets directly to short-term liabilities, a ratio of 1 or more indicates that a company would be ...