Ratios like the acid test and current ratio help determine a firm's liquidity. Solvency, although related, refers to a company's ability to instead meet its long-term debts and other such obligations.

Learn about the current ratio, a fundamental financial metric that measures a company's ability to pay off its short-term liabilities with its short-term assets.

The current ratio is calculated by dividing a company's current assets by its current liabilities. Ratios of 1 or higher indicate short-term solvency.

Excel Maritime Carriers' ratio in this category is a bit shaky, currently standing at 0.7. We look for current ratios greater than 1, meaning that a company could use its current assets to ...