Includes cash and other resources that can be converted into cash or used within the normal operations of a business within a relatively short period of time, usually less than one year. Debts and other amounts owed to creditors by the business entity due within one year. Includes wages payable, accounts payable, dividends payable, taxes payable, and so forth. Current Ratio . A commonly used method of measuring a firm's short term solvency by indicating its ability to pay current debts from current assets.
Current ratio is calculated by dividing current assets by current liabilities.
A measure of long-term financial solvency of a firm showing the relationship between borrowed capital and owner's equity. A high ratio might indicate room for capital expansion. Financing through borrowing capital that must be repaid. Disposable personal income less amount spent for necessities such as food, shelter, medical expenses, etc. Disposable Personal Income.