The Balance Sheet Current Ratio is a financial ratio that measures a company’s liquidity and ability to meet short-term obligations. It compares the amount of current assets, like cash and accounts receivable, to the amount of current liabilities, such as accounts payable and debt due within one year. A higher ratio indicates greater liquidity and a better ability to pay off debts when they come due. A lower number, however, means that the company may be at risk for not having enough cash on hand to cover their immediate expenses. In general, the recommended balance sheet current ratio is 2:1 or greater. That means for every two dollars of current liabilities, there should be at least two dollars of current assets available to cover them.