Current ratio
The current ratio compares what the company can turn into cash within the year with what it must pay within the year.
Formula
The codes are those of the National Bank of Belgium's annual-accounts formats; they are the ones Idonis uses for every company profile.
How to read it
Above 1, current assets cover current liabilities; below 1, the company relies on future receipts or new financing to meet its payments.
A very high ratio is not necessarily better: it may reflect idle cash or slow-moving stock.
Inventories sell more slowly than receivables are collected: the quick ratio leaves them out. Compare with the sector, as retail carries more stock than services.
Current ratio: medians of the main Belgian sectors
Computed by IdonisFor financial year 2024, in the sectors with the most companies: a quarter of companies below the 1st quartile, half below the median, three quarters below the 3rd quartile.
| Sector | 1st quartile | Median | 3rd quartile | Companies |
|---|---|---|---|---|
| Activities of head offices and management consultancy | 0.81 | 1.79 | 3.98 | 49,422 |
| Real estate activities | 0.24 | 1.00 | 2.56 | 47,289 |
| Specialised construction activities | 1.05 | 1.67 | 3.03 | 46,440 |
| Retail trade | 0.84 | 1.38 | 2.58 | 42,326 |
| Human health activities | 1.30 | 2.98 | 6.38 | 39,251 |
| Wholesale trade | 0.93 | 1.53 | 2.99 | 33,978 |
| Computer programming, consultancy and related activities | 1.10 | 2.12 | 4.34 | 25,494 |
| Financial service activities, except insurance and pension funding | 0.34 | 1.16 | 3.44 | 24,018 |
| Food and beverage service activities | 0.46 | 1.01 | 1.90 | 23,898 |
| Legal and accounting activities | 1.04 | 1.93 | 4.03 | 20,437 |
Medians computed by Idonis from annual accounts filed with the National Bank, all sizes combined. The same panel is the sector benchmark on every company page. Belgian companies by sector →
Frequently asked questions
How do I calculate the current ratio of a Belgian company?
Add inventories (3), receivables within one year (40/41), short-term investments (50/53), cash (54/58) and deferred charges (490/1), then divide by amounts payable within one year (42/48) plus accrued charges (492/3).
What is a good current ratio?
Around 1 or higher, depending on the sector. The table on this page gives the median and quartiles of the main Belgian sectors.
What is the difference between the current ratio and the quick ratio?
The quick ratio removes inventories from the numerator: it only counts receivables, investments and cash.