Current Ratio
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Analysis and Interpretation of Financial Statements for Decision Making
MS: Nisbah Semasa · EN: Current Ratio · ZH: 流动比率
Meaning
The current ratio (working capital ratio) compares current assets with current liabilities. Its formula is current assets ÷ current liabilities. A ratio of around 2:1 is usually considered healthy because the business can pay its short-term debts.
Example
Terang Electric Shop has current assets of RM80,000 and current liabilities of RM40,000. The current ratio is 80,000 ÷ 40,000 = 2 times, or 2:1, indicating a good liquidity position.
Source: DSKP KSSM Prinsip Perakaunan Tingkatan 5