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TeachMeFinance.com - explain current ratio current ratio -- Current Assets/Current Liabilities. This ratio should be 1.0 or greater for liquidity. If it drops below 1.0, the ability to pay bills is impaired. If it is greater than 1.0, there is a possibility that assets are not being used efficiently to generate new revenue. another definition... Current Ratio -- The ratio of current assets to liabilities. Also called "quick ratio." another definition... current ratio -- the ratio of total current assets to total current liabilities, calculated by dividing current assets by current liabilities. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.