Current Ratio

Current assets are those expected to be converted into cash within a year, such as cash, bank balances, receivables, short-term investments, inventory and prepaid expenses. Current liabilities are obligations due within a year, such as creditors, short-term loans, bank overdraft, outstanding expenses and the current portion of long-term debt.

The traditional rule of thumb is a current ratio of 2:1, meaning current assets are twice current liabilities, giving a cushion if some assets such as inventory cannot be turned into cash quickly. A ratio below 1 means the firm may struggle to meet short-term dues. A very high ratio is not ideal either, because it may indicate idle cash, slow-moving stock or poor credit collection.

Bank credit officers use the current ratio when appraising working capital loans, because it shows whether the borrower's net working capital is adequate. The quick ratio is a stricter version that excludes inventory and prepaid expenses.

चालु सम्पत्ति एक वर्षभित्र नगदमा परिणत हुने सम्पत्ति (नगद, बैंक मौज्दात, आसामी, अल्पकालीन लगानी, मौज्दात, अग्रिम भुक्तानी) हुन् र चालु दायित्व एक वर्षभित्र तिर्नुपर्ने दायित्व (साहु, अल्पकालीन ऋण, अधिविकर्ष, भुक्तानी बाँकी खर्च) हुन्।

परम्परागत मान्यताअनुसार आदर्श चालु अनुपात २:१ हो। १ भन्दा कम भए अल्पकालीन दायित्व तिर्न कठिनाइ हुन सक्छ; अत्यधिक उच्च अनुपातले निष्क्रिय नगद वा सुस्त मौज्दात देखाउँछ। बैंकले चालु पुँजी कर्जा विश्लेषण गर्दा यो अनुपात प्रयोग गर्छ।