A contractor's current ratio is 0.8. This means:
Explanation
The current ratio is current assets divided by current liabilities, so 0.8 means eighty cents of short-term resources against every dollar of short-term obligation and the bills due this year exceed what is on hand to pay them. Having more current assets than liabilities would put the ratio above 1.0, the opposite of this figure. A ratio under 1.0 is the definition of weak liquidity, not strong. And the current ratio says nothing about profit, which comes from the income statement.
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