Both show the entity's ability to meet short-term obligations. They should be interpreted in light of the industry's operating cycle; a company with high inventory may show a misleadingly strong current ratio.
Source: Finansal analiz uygulaması
Related terms
Working capitalThe difference between current assets and current liabilities; in practice usually used as net working capital, consisting mainly of trade receivables, inventories and trade payables.Current and non-current assetsThe classification of assets according to whether they will be realised within the normal operating cycle or within twelve months after the reporting date.Cash conversion cycleDays inventory outstanding plus days sales outstanding minus days payables outstanding, showing how many days cash is tied up in the operating cycle.BetaA coefficient measuring the sensitivity of a share's return to changes in the market return, that is, its systematic risk.Break-even pointThe sales volume or amount at which total revenue equals total cost and the business makes neither profit nor loss.Capital asset pricing model (CAPM)A model that calculates the cost of equity from the risk-free rate, beta and the market risk premium.
Last updated: November 8, 2026 · This definition is for general information only.