Current Ratio Formula in Excel

Understanding Current Ratio

The current ratio is a key liquidity measure of a company’s ability to pay off its short-term debts with its short-term assets. A higher ratio typically indicates stronger liquidity and a lower ratio can signal potential challenges in meeting financial obligations.

  • Purpose and Use Cases

    • Assess a company's short-term financial health.
    • Compare liquidity across different companies.
    • Identify potential cash flow constraints.

  • Key Benefits

    • Quickly evaluates solvency risks.
    • Informs investment decisions and portfolio management.

  • When to Use

    • Before making investment decisions.
    • For benchmarking against industry peers.
    • During financial statement analysis for risk assessment.

Syntax and Parameters

Syntax

Use the following syntax in Excel to call the function:

=current_ratio(Symbol)

?? Note: You must have a valid MarketXLS license for the function to work properly.

Parameter Table

Parameter Description Required Example
Symbol The ticker symbol or identifier of the company or asset you want data for. Yes "MSFT" or "BTCUSD:DEFAULT"

Return Value

  • Data Type: Numeric (ratio)
  • Description: The function returns the current ratio, which indicates how many times a company can cover its short-term debt with short-term assets.
  • Error Handling: If the symbol is invalid or other data issues occur, the function returns "NA".

Examples and Usage

Below are some practical examples of how to use the current_ratio function with different symbol formats:

  • Regular symbol lookup:
    =current_ratio("MSFT")
  • Index lookup:
    =current_ratio("^SPX")
  • Option symbol lookup:
    =current_ratio("@MSFT 110122C00020000")
  • Cryptocurrency lookup:
    =current_ratio("BTCUSD:DEFAULT")

? Pro Tip: Use cell references for dynamic analysis, e.g. =current_ratio(A1), where A1 contains the symbol string.

Advanced Scenarios

  • Quickly glance at multiple stocks by referencing cells with different symbols.
  • Combine with other MarketXLS formulas (e.g., Market Capitalization, Paydate) for a more robust financial snapshot.

Common Questions

  1. What does a high current ratio indicate?
    A ratio above 1 suggests the company has more short-term assets than short-term liabilities. Very high ratios, however, could indicate underutilized resources.

  2. Why am I getting “NA”?

    • Invalid or non-tradable symbol.
    • License issues with MarketXLS.
    • Temporary data source unavailability.

  3. Are there performance considerations?

    • Yes. Each function call retrieves data from MarketXLS servers. When dealing with many symbols, it may slow down Excel.
    • Consider limiting the frequency of real-time calculations or using data caching.

  4. Does the function support date inputs?
    This particular function does not require date inputs. It focuses on the latest available data.

  5. Where can I find more related functions?

    • Market Capitalization (On Demand)
    • Basic Earnings Per Share (On Demand)
    • Shares Outstanding (On Demand)
    • Paydate (On Demand)
    • Earning Per Share (TTM)

?? Note: Always ensure your symbols are valid and spelled correctly to avoid inaccuracies in your analysis.

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MarketXLS Excel Add-in Tutorial - How to Use Current Ratio and Other Financial Formulas
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