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Current ratio

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nishant sahai

43 Points Posted on 31 March 2021

I am getting a current ratio of 13 to 29.8 in a new project report as there is less current liabilities projected so what does it means? Am i doing something wrong? is it correct to have this kind of current ratio?

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Quick Summary

A current ratio of 13:1 or 29.8:1 indicates a very healthy position where current assets significantly exceed current liabilities. This suggests the project is unlikely to face short-term cash flow issues. While a high ratio is generally positive, it's worth noting that actual results can vary, and extreme ratios might warrant a closer look at asset management.

yasaswi gomes

My grammar is 💯 good I

7306 Points Posted on 31 March 2021

Actually it is represented as 13:1 or 29.8:1 which means, for every unit of liability, there are 13 units of assets or 29.8 units of assets. This is a high ration and nothing to worry about because the actual results will vary/