Financial health
Current assets and liabilities
Current
What it is
"Current" means: within one year. Current assets are what will turn into cash within the year (inventory, receivables); current liabilities, what must be paid within the year.
How to read it
Compare the two. Current assets comfortably above current liabilities suggest the company can meet near-term obligations without borrowing or selling its facilities.
What it does not tell you
Not every current asset converts to cash equally fast: unsellable inventory or a doubtful receivable sits on the balance sheet long after it stopped being worth anything.
Other measures — Financial health
Educational content. Polaris is not a registered investment adviser and makes no recommendation.