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Water: Economics

Policy & Guidance: Worksheet J

Interim Economic Guidance for Water Quality Standards

Calculation of The Current Ratio

CR = CA ÷ CL

Where: CR = Current Ratio

CA =

Current Assets (the sum of inventories, prepaid expenses, and accounts receivable)

CL =

Current Liabilities (the sum of accounts payable, accrued expenses, taxes, and the current portion of long-term debt)

Three Most Recently Completed Fiscal Years


19 ___

19 ___

CA $________
$________ (1)
CL $________
$________ (2)

CR [Calculate: (1)/(2)] ________
________ (3)


Is the most recent year typical of the three years? __ Yes __ No

(If not, you might want to use an earlier year or years for the analysis)

Is the Current Ratio (3) greater than 2.0? __ Yes __ No

How does the Current Ratio (3) compare with the Current Ratios for other firms in this line of business?

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