Why is the current ratio important? What does it tell you

Calibri (Body) 11 AA Paste B I UV - V = E C1 X V fx A B C D E ECO Balance Sheet as at 31st July N ECO Balance Sheet as at 31st July A W Adjusted Totals Assets Current Assets Cheque Account $41,518.00 $69,018.00 8 Trade Debtors $27,500.00 $27,500.00 9 Total Current Assets $69,018.00 $96,518.00 10 11 Fixed Assets 12 Equipment at Cost $5,000.00 $65,000 13 Equipment - Accumulated Depreciation $2,000.00 ($2,000) 14 Total Fixed Asssets $3,000.00 $63,000.00 15 16 Total Assets $72,018.00 $159,518.00 17 18 Liabilities 19 Current Liabilities 20 Trade Creditors $11,000.00 $11,000.00 21 GST Collected $2,500.00 $2,500.00 22 GST Paid $1,500.00 ($5,454.55) 23 Contractors $17,500.00 24 Salaries $10,000.00 25 Total GST Liabilities $1,000.00 ($2,954.55) 26 Credit Card $60,000.00 27 Total Current Liabilities $13,000.00 $95,545.45 28 Total Liabilities $13,000.00 $95,545.45 29 30 Net Assets $59,018.00 $63,972.55 31 32 Equity 33 Retained Earnings - Current $39,018.00 $43,972.55 34 Owner's/Shareholder Capital $20,000.00 $20,000.00 35 Total Equity $59,018.00 $63,972.55 36 37 38 39 40 41 42