CURRENT RATIO.

CURRENT RATIO.

            Current Ratio is equal to Current Assets divided by current liabilities. This ratio shows a business ability to cover its short term liabilities out of its current assets. Higher current ratio shows that business has sufficient resources to pay its current obligations. Normally Current assets are consists of Stores, spare and loose tools, inventory, Trade Debts, Advances, deposits, prepayment, Cash and cash equivalent. Current liabilities includes Trade and other payable, markup accrued, accrued expenses, short term borrowing, current portion of long term liabilities.

Current Ratio =	Current Assets
	Current Liabilities