The Current Ratio is a financial metric used to assess a company's ability to pay its short-term liabilities with its short-term assets. It is calculated by dividing the total current assets by total current liabilities. A ratio above 1 indicates that the company has more assets than liabilities, suggesting good short-term financial health. Investors and analysts often use the Current Ratio to evaluate a company's liquidity and operational efficiency. A higher ratio may indicate a stronger financial position, while a lower ratio could signal potential liquidity issues. However, an excessively high ratio might suggest that a company is not effectively using its assets.