Which of the following is a formula used to calculate the current ratio?

The current ratio is a financial metric that measures a company's ability to pay its short-term obligations with its short-term assets. The correct formula for calculating the current ratio is current assets divided by current liabilities. This ratio is a key indicator of liquidity and financial health; a higher ratio suggests that the company has more than enough assets to cover its current liabilities, which is generally a positive sign for creditors and investors.

In this case, the numerator, current assets, represents what the company owns that is likely to be liquidated or converted into cash within one year, while the denominator, current liabilities, represents what the company owes that needs to be settled in the same timeframe. This relationship enables stakeholders to assess whether the entity can meet its short-term financial obligations effectively.

Other formulas listed do not accurately reflect this relationship. For instance, comparing current liabilities to current assets reverses the relationship and does not provide a true measure of liquidity. Similarly, the inclusion of "current revenue" instead of "current liabilities" does not pertain to the current ratio calculation at all; this shifts the focus from liquidity to operational performance, which is not relevant for this specific financial analysis.