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##### Asked by: Rania Dziadik

personal finance credit cards# What is a good current ratio for a nonprofit?

Last Updated: 10th March, 2020

**Current ratio**measures the ability to pay off short-term obligations. To calculate the

**current ratio**, divide

**current**assets by

**current**liabilities. It is always

**good**to be in the positive, but a truly

**good ratio**is 2-to-1, which means that you have twice as much in

**current**assets as

**current**obligations (liabilities).

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In this regard, what is a good debt to equity ratio for nonprofits?

The **recommended** range of the **ratio** is between 1.25X and 2.00X. However, the 'right' **ratio** is organization-specific and varies by an organization's **debt** policies.

Furthermore, what is a good current ratio for a bank? The company has a **current ratio** of 2.0, which would be considered a **good ratio** value in most industries. While the value of acceptable **current ratios** varies from industry, a **good ratio** would often be between 1.5 and 2.

Also know, what is a good expense ratio for a charity?

The **average** for the list is 86%, meaning that the **typical charity** was able to bank 14% of donations for the future. This **ratio** is highly sensitive to investment results and for many **charities** varies wildly from year to year. For the other two ratios, all other things being equal, the higher the **ratio** the better.

What is the industry average for current ratio?

Here's a breakdown of **average current ratios** for five common **industries**. The construction **industry** has an **average current ratio** of 0.97. This **industry** includes new work, tenant improvement work, highways or utility systems, maintenance, and repairs. The manufacturing **industry** has an **average current ratio** of 2.14.