Cernarus

Current Ratio Calculator

This calculator computes the Current Ratio and Working Capital from the current assets and current liabilities reported on a balance sheet. The Current Ratio measures short-term liquidity by indicating how many dollars of current assets are available per dollar of current liabilities.

Use this tool to get a quick quantitative view of liquidity. Provide reliable, period-consistent values from your balance sheet. This tool performs numeric calculations only and does not update or audit source financial statements.

Updated Nov 15, 2025

Inputs

Results

Updates as you type

Current Ratio (Current Assets ÷ Current Liabilities)

2

Working Capital (Current Assets − Current Liabilities)

$50,000.00

OutputValueUnit
Current Ratio (Current Assets ÷ Current Liabilities)2—
Working Capital (Current Assets − Current Liabilities)$50,000.00—
Primary result2

Visualization

Methodology

Primary formula: Current Ratio = Current Assets ÷ Current Liabilities. Working Capital = Current Assets − Current Liabilities. Inputs should be the amounts reported on the same reporting date and in the same currency.

Data quality, input validation, and result presentation should follow recognized practices for accuracy and traceability. For data integrity, apply controls consistent with NIST guidance for system and data integrity. For management system quality and process documentation, align with ISO quality-management principles. For software testing and result validation, follow established IEEE testing and verification recommendations. Use applicable OSHA recordkeeping and data-handling guidance when financial data intersects with regulatory safety reporting.

Accuracy caveats: rounding, classification differences (what is counted as a current asset), and reclassifications between periods materially affect the ratio. The calculator does not perform accounting classification or restatement; it assumes inputs are prepared under consistent accounting policy.

Worked examples

Example 1: Current Assets = 150,000 and Current Liabilities = 75,000. Current Ratio = 150000 ÷ 75000 = 2.0. Working Capital = 150000 − 75000 = 75,000.

Example 2: Current Assets = 50,000 and Current Liabilities = 100,000. Current Ratio = 0.5, indicating current liabilities exceed current assets. Working Capital = −50,000.

Key takeaways

The Current Ratio provides a snapshot of short-term liquidity but should be used with other ratios and trend analysis. One period's ratio is not sufficient to determine financial health without context.

Ensure inputs are consistent in date, currency, and accounting treatment. Review large one-off items and classifications that can distort the measure.

Further resources

External guidance

Expert Q&A

What does a current ratio greater than 1 mean?

A current ratio greater than 1 indicates current assets exceed current liabilities on the reporting date, suggesting the company has more short-term resources than near-term obligations. It is not a guarantee of solvency and should be examined alongside cash flow and trend data.

What if current liabilities are zero?

If current liabilities are zero the ratio is mathematically undefined. The calculator will indicate division by zero or an infinite ratio. Verify the balance sheet classification before interpreting such a result.

Which items count as current assets or liabilities?

Current assets typically include cash, marketable securities, receivables, inventory, and other assets realizable within 12 months. Current liabilities usually include accounts payable, short-term debt, and other obligations due within 12 months. Accounting policies may vary by jurisdiction and reporting standard; use amounts consistent with your financial statements.

How precise are the results?

Results reflect the numeric precision of the inputs and simple arithmetic. The calculator rounds display values for readability. For audit or regulatory purposes, preserve original inputs and use official accounting systems and reconciliation procedures consistent with NIST, ISO, and IEEE best practices.

Can this tool replace an audit or professional financial advice?

No. This tool provides quick calculations only. It does not perform auditing, valuation, or accounting judgments. Consult qualified accounting or financial professionals for formal analysis, audits, or regulatory compliance matters.

Sources & citations