The current ratio is a business ratio that indicates the relationship between a company's current assets and current liabilities. It is integrated into SAP Business One as a predefined key performance indicator (KPI) for evaluating short-term solvency.
Detailed explanation/description:
The current ratio measures a company's ability to fulfil its short-term obligations. liabilities by assets available at short notice. The higher this value, the better the company's liquidity position.
In SAP Business One the current ratio is available as a standardised KPI and is based on predefined key financial figures:
- Total current assets (total current assets)Total of all current assets on the current day, including inventories and receivables. Derived from the financial KPI factor 005.
- Total current liabilities (total current liabilities)Total of all liabilities due within one year. Derived from the financial KPI factor 008.
Calculation formula:
Current ratio = total current assets ÷ total current liabilities
This key figure is available in SAP Business One for certain localisations (e.g. DE, CN, GB, US) and can be used in Pervasive dashboards or Advanced Dashboards can be used to monitor the financial situation.
A value above 1.0 is generally regarded as positive. A range between 1.5 and 2.0 is ideal to ensure financial stability. The current ratio is an important basis for decision-making, particularly for company owners, lenders and investors.
Versino Financial Suite
With the Versino Financial Suite makes monitoring and analysing the current ratio in SAP Business One much more convenient, transparent and informative. It offers real-time transparency, drill-down options, automated checks and flexible reports - a clear added value for liquidity and risk management in the company.
Key features/important aspects:
- Predefined KPI in SAP Business One
- Based on current balance sheet data
- Directly available in dashboards and reports
- Helps with financial risk analysis
Advantages/benefits (optional):
- Early recognition of financial bottlenecks
- Standardised KPI for comparability across companies
Best practices/instructions for use (optional):
- Regular monitoring in the dashboard for Liquidity management
- View together with Quick and Cash Ratio for more comprehensive analysis
Target group:
Financial accountant, controller, consultant, management
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