Calculate Current Ratio Accounting is a measure of a company’s liquidity, which looks at the amount of liquid assets the company possesses compared to its current liabilities. It’s an easy way to tell whether or not a business has enough cash set aside to pay their upcoming bills and debts. Companies primarily use their current ratio to decide if they can go ahead with certain investments or operations with the money available. A high ratio indicates that the company is in good financial health, while a lower ratio could be a warning sign that the business may soon run into trouble. To calculate the current ratio, simply divide a company’s current assets by its current liabilities.