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Cash Ratio Calculator

Written by:
PK

Below is a cash ratio calculator. Enter a company's cash and cash equivalents current liabilities to compute the cash ratio.

Cash Ratio Calculator

What is a company's cash ratio?

A company's cash ratio is one of the most aggressive liquidity ratios, and measures a company's ability to meet short term liability needs using only cash and cash equivalents. While other ratios like the quick ratio allow for selling of marketable securities and receiving owed payments, the cash ratio only allows immediately accessible cash.

A ratio of 1 or greater means the company can meet its short term needs with its cash. A ratio less than 1, however, doesn't mean the company is illiquid necessarily – compare it to some of the other liquidity ratios in the links below to double check.

Cash Ratio Formula

The quick ratio formula is:

cash\ ratio=\frac{cash\ \&\ cash\ equivalents}{current\ liabilities}

Where:

  • Cash and Cash Equivalents – short-term assets which are as good as cash, or other names for cash (like "petty cash")
  • Current Liabilities – short-term liabilities listed on the balance sheet

Other Liquidity Calculators

Liquidity ratios show how easily a company can meet its near term debts. See other tools:

      

PK

PK started DQYDJ in 2009 to research and discuss finance and investing and help answer financial questions. He's expanded DQYDJ to build visualizations, calculators, and interactive tools.

PK is in his mid-30s and works and lives in the Bay Area with his wife, two kids, and dog.

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