Which financial metric is calculated as current assets divided by current liabilities?

The financial metric calculated as current assets divided by current liabilities is commonly referred to as the Current Ratio. This ratio is crucial for assessing a company's short-term liquidity and financial health. It gives insight into a company's ability to cover its short-term obligations with its short-term assets. A Current Ratio greater than one indicates that a company has more current assets than current liabilities, suggesting that it is in a good position to meet its short-term liabilities. Conversely, a ratio less than one may signal potential liquidity issues.

While other financial metrics such as the Debt-to-Equity Ratio, Liquidity Ratio, and Profitability Ratio are also important, they measure different aspects of financial performance. The Debt-to-Equity Ratio assesses a company's financial leverage, the Liquidity Ratio can encompass multiple ways to measure liquidity (including but not limited to the Current Ratio), and the Profitability Ratio evaluates a company's ability to generate profit relative to its revenue, assets, or equity. Therefore, the Current Ratio is the specific metric directly defined by the formula of current assets divided by current liabilities.