Current ratio
The current ratio shows how able an organization is to pay its bills quickly. It is used to measure the liquidity of a company's short-term. Analysts use the ratio to decide whether or not to lend money or invest in a company. To calculate the current percentage, multiply the total current assets by all current liabilities.
The cash balance near zero is when a company uses its line of credit to pay its bills. This could mean that the current ratio is quite low and the availability of a credit line still allows the business the ability to pay on time. This situation requires that creditors are made aware by the company of the remaining credit balance. They can then use this to pay other bills. There is still the longer-term question of whether the company can repay the line.
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