Ratio Analysis is another technique used to compare the financial statements of companies with different business models, or of different size. There are different types that compare different aspects across companies. The Current Ratio is defined as (Current Assets / Current Liabilities) and is expressed as a decimal, such as 0.82 or 1.23 with the higher number being preferred. It measures the ability to pay shortterm obligations with current assets such as Cash and Accounts Receivable. This is an example of a Profitability Ratio Liquidity Ratio Capital structure Ratio Coverage Ratio