# Current assets to equity ratio

Posted in: Financial statement analysis (explanations)

**Current assets to equity ratio** (also known as current assets to proprietors’ fund ratio) shows the stockholders’ funds invested in current assets. The ratio may be expressed in proportion or percentage.

## Formula:

## Example:

For example, suppose a company has current assets valuing $650,000 and stockholders’ equity $4,500,000. The current assets to equity ratio would be computed as follows:

= $650,000 / $4,500,000

= 0.14 or 14%

## Significance and interpretation:

There is no norm, the ratio varies from industry to industry. Like fixed assets to equity ratio, it is used as a complementary ratio to proprietary ratio.

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