Financial Ratios Calculator: Current Ratio, Quick Ratio, Debt-to-Equity
Check a company’s short-term liquidity and long-term financial strength in one place, using figures straight from its balance sheet and income statement.
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The Ratios and Their Formulas
| Ratio | Formula | Generally healthy |
|---|---|---|
| Current ratio | Current assets ÷ Current liabilities | 1.5 – 3 |
| Quick ratio | (Current assets − Inventory) ÷ Current liabilities | 1 or more |
| Cash ratio | Cash ÷ Current liabilities | 0.2 – 1 |
| Debt-to-equity | Total debt ÷ Shareholders’ equity | Below 1–2, by industry |
| Interest coverage | EBIT ÷ Interest expense | 3× or more |
| Working capital | Current assets − Current liabilities | Positive |
Works in any currency — enter all amounts in the same one.
What Each Ratio Tells You
- Liquidity (current, quick, cash): can the company pay bills due in the next 12 months? The quick ratio excludes inventory, which may be slow to sell.
- Leverage (debt-to-equity): how much of the business is funded by lenders rather than owners. Higher means more risk and more fixed payments.
- Coverage (interest coverage): how many times operating profit covers interest. Lenders often want at least 2×–3×.
Context Matters
A supermarket can run safely with a current ratio near 1 because stock turns into cash daily; a manufacturer with slow-moving stock needs more. Utilities and real estate firms routinely carry high debt-to-equity. Always compare against companies in the same industry and against the company’s own trend over several years.
Frequently Asked Questions
What is a good current ratio?
Roughly 1.5 to 3 for most businesses. Below 1 can signal difficulty paying short-term bills; very high ratios may mean idle cash or slow-moving stock.
What is the difference between the current and quick ratio?
The quick (acid-test) ratio leaves out inventory, giving a stricter test of liquidity.
What is a good debt-to-equity ratio?
Many analysts treat below 1 as conservative and above 2 as high, but capital-heavy industries normally run higher.
Where do I find these numbers?
Current assets, inventory, cash, current liabilities, debt and equity are on the balance sheet; EBIT and interest expense are on the income statement.