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The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's Total Current Assets divides by its Total Current Liabilities. PennantPark Floating Rate Capital's current ratio for the quarter that ended in Mar. 2015 was 0.79.
PennantPark Floating Rate Capital has a current ratio of 0.79. It indicates that the company may have difficulty meeting its current obligations. Low values, however, do not indicate a critical problem. If PennantPark Floating Rate Capital has good long-term prospects, it may be able to borrow against those prospects to meet current obligations.
During the past 4 years, PennantPark Floating Rate Capital's highest Current Ratio was 2.14. The lowest was 0.06. And the median was 0.40.
The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets.
PennantPark Floating Rate Capital's Current Ratio for the fiscal year that ended in Sep. 2014 is calculated as
|Current Ratio (A: Sep. 2014 )||=||Total Current Assets (A: Sep. 2014 )||/||Total Current Liabilities (A: Sep. 2014 )|
PennantPark Floating Rate Capital's Current Ratio for the quarter that ended in Mar. 2015 is calculated as
|Current Ratio (Q: Mar. 2015 )||=||Total Current Assets (Q: Mar. 2015 )||/||Total Current Liabilities (Q: Mar. 2015 )|
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Because business operations differ in each industry, it is always more useful to compare companies within the same industry.
Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for healthy businesses.
The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.
If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.
PennantPark Floating Rate Capital Annual Data
PennantPark Floating Rate Capital Quarterly Data