The funny thing about a lot of companies with a durable competitive advantage is that quite often their current ratio is below the magical one. Moody’s comes in at .64, Coca-Cola at .95, Procter & Gamble at .82, and Anheuser-Busch at .88. Which, from an old-school perspective, means that these companies might have difficulties paying current liabilities. What is really happening is that their earning power is so strong they can easily cover their current liabilities.
