**The current ratio shows a company’s ability to pay its short-term debts. The formula is current assets divided by current liabilities. **

This current ratio calculator calculates the proper formate for current ratio. The only numbers needed are current assets and current liabilities.

## Current Ratio Formula

The current ratio formula is **Current Assets / Current Liabilities**. Current assets and current liabilities are both shown on the balance sheet.

For example, assume current assets are $14,000 and current liabilities are $10,000. The current ratio is 1.40. So, for every one dollar in current liabilities, the company has $1.40 in current assets.

See Current Ratio Definition for more complete information.