A ratio above 1 means short-term assets cover short-term claims on paper. What counts as healthy varies enormously: a supermarket runs below 1 because it sells for cash and pays suppliers later, while a machinery maker may need 2 because inventory takes months to turn.
The weakness is that it treats slow inventory as equivalent to cash. The quick-ratio and cash-ratio tighten the test progressively.
Example: Northwind Tools has $570M of current assets and $310M of current liabilities, a current ratio of 1.8. Its retail arm alone would show 0.9, which is normal for retail.
Related: quick-ratio, cash-ratio, working-capital, current-liabilities, current-assets