# Current ratio formula - Current ratio definition — AccountingTools

## What is Quick Ratio? How Do You Calculate It?

If a current ratio is above 3 If a company calculates its current ratio at or above 3, this means that the company might not be utilizing its assets correctly.

• In this situation, the outcome of a current ratio measurement is misleading.

• Posisi likuiditas entitas mungkin secara implisit terlihat sehat jika rasio lancar lebih tinggi dari satu dan tidak sehat jika rasionya kurang dari satu.

## Current ratio analysis — AccountingTools

Transformation Ratio More often, the ratio of the secondary voltage to the primary voltage is termed as transformation ratio and denoted by the letter K.

• This is because a high current ratio represents two things: either an excess of cash or its equivalent relative to the current needs or a preponderance of current assets having low liquidity.

• Other ratios that companies use to determine their financial standings include the quick ratio and the operating cash flow ratio.

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