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Current Ratio = Current Assets /Current Liabilities
Working Capital = Current Assets - Current liabilities
The purpose of Calculation almost works the same purpose and hence it is meaningful to interpret the same as mentioned above as: Both are two facets of one coin.
Yes it is two facets of one coin
It measure liquidity and ability to pay shortterm obligations
Current assets - / current liabilities
Both are two facets of one coin.
yes it is.
yes, I do agree
Working capital and the current ratio measure the liquidity of your business - its ability to meet short-term debt with current assets.
Together, these are two of the most common measures of financial strength. The current ratio shows whether a company has sufficient access to cash to continue operations after paying off current liabilities. Working capital is the dollar amount by which current assets exceed current liabilities.
