What is the current ratio? The current ratio, sometimes referred to as the working capital ratio, is a metric used to measure a company's ability to pay its short-term liabilities, or those due ...

while a lower ratio might signal underutilization of available resources. Companies using just-in-time operations can run with minimal working capital by ordering inventory only when needed.

Assess Working Capital Ratios: Metrics like the current ratio, quick ratio, and working capital turnover provide insights into how efficiently a company manages its short-term assets and liabilities.