Overview

Cash ratio, also known as the cash asset ratio, is a liquidity ratio used to measure how well a company is able to meet its short-term debt obligations with its existing cash and equivalents. Cash ratio is a more conservative metric than the current ratio and quick ratio because it only considers cash and cash equivalents as the most liquid assets of the company that can be used to pay off debt. The formula for calculating the cash ratio is:

Cash Ratio = Cash and Cash Equivalents / Current liabilities

Reviews Add a review
No reviews yet

More From Corporate Finance Institute®

Browse our top rated business templates. See All
REIT Financial Model Template
9,711
26
This REIT financial model template acts as a guideline for modeling a real estate investment trust (REIT). This model will…
Energy Industry Comps Template Energy Industry Comps Template
8,674
620
This energy industry comps template provides a guideline and example of what a comparables universe would look like for a…
Financial Institution Dividend Discount Model
9,920
814
The financial institution dividend discount model uses future dividends to find the implied share price. This model is based on…
Loan Payment Calculator
9,134
880
The loan payment calculator allows users to determine the principal and interest payment each month until the full balance of…
DDM - Excel Dividend Discount Model Template
13,722
1942
The dividend discount model template allows investors to value a company base on future dividend payments. This is based on…
Non-directional trading strategy template Non-directional Trading Strategies Template
8,538
246
The non-directional trading strategies template allow users to determine the profit when buying options. This template focuses on non-directional strategies…
See All