The current ratio includes inventory while the quick ratio does not. Both ratios can be used to determine a company’s liquidity, but the choice depends on the company and its inventory value. Tracking both ratios can help determine if inventory is holding at a beneficial level. The difference between the current ratio and the quick […]
Current dollars reflect the value of a currency in contemporary economic conditions without adjusting for inflation, making it useful for comparing costs of goods from different time frames. It can reveal a currency’s purchasing power and help predict future trends. The concept of current dollars has to do with understanding the value of a given […]
Current liabilities are debts that must be paid off within the current fiscal year, including recurring expenses and short-term loans. Long-term debts with payments due in the current year can also be considered current liabilities. In terms of accounting practices, current liabilities are understood to be any outstanding debt that is expected to be paid […]
