The current ratio is a financial ratio that measures if a firm has enough resources to pay its debts over the next 12 months. It is derived by calculating the ratio of current assets to current liabilities. A value of less than 2.0 is usually considered a source of some concern, though the ratio will vary from industry to industry. The current ratio includes inventory, but not all inventory may be liquidated at the same price as the value on the books, so the ratio is often considered together with the liquidity ratio. As with all ratios, the trend is more important than any one value. See also Ratio Analysis and Ratio, Liquidity.