Cash Ratio

Online Calculators for Business & Investment

Cash Ratio

The Cash Ratio is the strictest of the liquidity ratios we have. It is a ‘hard and fast’ measure of a business’ ability to meets its debts in the very near term. It measures obligation serviceability if hypothetically a debt was due in a few days time, or less; which is much stricter than the 12-months that the current ratio implies. To meet the current liabilities in this ratio, you only look at cash in the bank and the most liquid investments which can essentially be called on-demand.

A Cash Ratio of 2.13 or 1.12 simply means that you can meet your current liabilities 2.13 or 1.12 times over with your most liquid assets. Or in other words, for every dollar of current liabilities, there are $2.13 or $1.12 of highly liquid assets to meet these.

Cash Ratio Calculator

The calculator asks for:
Cash and Cash Equivalents, which is found in the Balance Sheet.
Short-Term Investments, which is also found in the Balance Sheet.
Current Liabilities, which is again found in the Balance Sheet.

Cash and Cash Equivalents ($):

Short-Term Investments ($):

Current Liabilities ($):

Cash Ratio:

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