Cash Ratio Calculator

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Cash Ratio calculator measures the ability to use its cash and cash equivalents to pay its current liabilities, an indicator of company's short-term liquidity. Cash Ratio formula is:

 Cash Ratio formula

Cash Ratio calculator is part of the Online financial ratios calculators, complements of our consulting team.

Terms of use

  1. Complementarily, in order to calculate the Cash Ratio for your business, we offer a calculator free of charge.

  2. You may link to this calculator from your website as long as you give proper credit to C. C. D. Consultants Inc. and there exists a visible link to our website.
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    <a href="/calculators/financial-ratios/cash-ratio-calculator-and-interpretation">Cash Ratio Calculator and Interpretation</a>
  3. Although C. C. D. Consultants Inc.'s personnel has verified and validated the Cash Ratio calculator, C. C. D. Consultants Inc. is not responsible for any outcome derived from its use. The use of Cash Ratio calculator is the sole responsibility of the user and the outcome is not meant to be used for legal, tax, or investment advice.

Definitions and terms used in Cash Ratio Calculator

Cash
Refers to money in the physical form of currency. Cash includes money in the cash pan, petty cash, cash in the locker, bank account and customers' checks.
Current Liabilities (short term debt)
Obligations or debts that are due within one fiscal year or the operating cycle. For example, accounts payable, accrued liabilities, dividends, unpaid taxes and other debts that are due within one year.

What is Cash Ratio

Cash Ratio is an indicator of company's short-term liquidity. It measures the ability to use its cash and cash equivalents to pay its current financial obligations.

Cash Ratio formula is:

 Cash Ratio formula

Cash Ratio Analysis

Cash ratio measures the immediate amount of cash available to satisfy short-term liabilities. A cash ratio of 0.5:1 or higher is preferred.

Cash ratio is the most conservative look at a company's liquidity since is taking in the consideration only the cash and cash equivalents.

Cash ratio is used by creditors when deciding how much credit, if any, they would be willing to extend to the company.