THESE STATISTICS ARE

always useful as a way to take a company's short-term temperature. Current assets are things like cash and cash equivalents, accounts receivable (money owed the company by customers) and inventories. They are defined as anything that could be sold quickly to raise money. Current liabilities are what the company owes in short order mostly accounts payable and short-term debt.

The thing to look for here is a big change from period to period. If the current-assets number grows quickly, it could mean the company is accumulating cash a good thing. Unfortunately, it could also mean that the company is having trouble collecting accounts receivables from customers clearly a bad thing. Precipitous growth in current liabilities is rarely good news, but it might be explainable due to some short-term corporate goal.

If you see a spike in either category, it's worth further explanation. Check the analyst research, news reports or get the financial statements and read the notes. Management is required to explain changes in the company's financial condition.

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