How to Improve Current Ratio
Current ratio refers to the firm's ability to service its short-term obligations. It is the ratio of current assets to current liabilities. For example, if the firm's total current assets are 200,000 and the total current liabilities are $80,000 then the current ratio is: 200,000 / 80,000 = 2.5. A healthy current ratio should be greater than 2.0. To increase current ratio, current assets should be increased or the current liabilities should be reduced.
Ways to improve your current ratio:
1) Pay off some debts like bank overdraft.
2) Increase current assets from new equity contributions.
3) Get a loan to increase your cash balance.
4) Renegotiate short-term debts to long-term financing.
5) Buy inventory with equity or long-term debt.
6) Increase the sales which will increase cash or accounts receivable.
7) Convert fixed assets to current assets, for example, sell unused office equipment or property for cash.
Ways to improve your current ratio:
1) Pay off some debts like bank overdraft.
2) Increase current assets from new equity contributions.
3) Get a loan to increase your cash balance.
4) Renegotiate short-term debts to long-term financing.
5) Buy inventory with equity or long-term debt.
6) Increase the sales which will increase cash or accounts receivable.
7) Convert fixed assets to current assets, for example, sell unused office equipment or property for cash.