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the following two tricks may help you remember how to compute and interpret the current ratio coverage the current ratio indicates how a companys current assets cover its current liabilities that is why current assets are placed on the top of current liabilities i.e current assets divided by current liabilities in the ratio so they can cover them current both the numerator current assets and the denominator current liabilities start with the word current hopefully these two little tricks will help you remember how to calculate and interpret the current ratio