Rytvae Consulting · Think Right · Invest Right
Current Ratio Calculator
Result
Chart
Show formula & working
Current ratio = Current assets ÷ Current liabilities
Typical lender reference: 1.33x or more — a reference point, not an approval criterion. 1.33x follows from Tandon Method II's 25% margin on current assets.Details
How this works
The current ratio compares what will turn into cash within a year with what must be paid within a year.
Working capital lenders traditionally look for about 1.33x, which leaves a quarter of current assets funded by long-term money.
Frequently asked questions
Is a very high current ratio good?
Not always — it can mean idle cash, slow-moving stock or slow collections.
Should bank working capital borrowings be included?
Yes, in the standard ratio. They are current liabilities.
Want your ratios read the way a lender reads them?
Classification, quasi-equity and one-off items all move the ratios. Talk to Rytvae before you approach lenders.