The current ratio is used to assess a company's ability to pay its current liabilities.
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The current ratio measures a company's ability to pay its current liabilities using its current assets. It is calculated by dividing current assets by current liabilities. A current ratio above 1 indicates that a company has more current assets than current liabilities and is therefore able to pay off its short-term debts.

The Current Ratio Is Used to Assess a Company's Ability