Cash Ratio Calculator

✖Cash and Cash Equivalents refer to assets that are readily convertible into cash and have a short-term maturity of typically three months or less from the date of purchase.ⓘ Cash and Cash Equivalents [C]			+10% -10%
✖Current Liabilities are the company debts or obligations that are due within one year.ⓘ Current Liabilities [CL]			+10% -10%

✖Cash Ratio is a liquidity ratio that measures a company's ability to pay off its current liabilities solely with its cash and cash equivalents.ⓘ Cash Ratio [Cash_R]

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Cash Ratio Solution

STEP 0: Pre-Calculation Summary

Formula Used

Cash Ratio = (Cash and Cash Equivalents/Current Liabilities)
Cash_R = (C/CL)
This formula uses 3 Variables

Variables Used

Cash Ratio - Cash Ratio is a liquidity ratio that measures a company's ability to pay off its current liabilities solely with its cash and cash equivalents.
Cash and Cash Equivalents - Cash and Cash Equivalents refer to assets that are readily convertible into cash and have a short-term maturity of typically three months or less from the date of purchase.
Current Liabilities - Current Liabilities are the company debts or obligations that are due within one year.

STEP 1: Convert Input(s) to Base Unit

Cash and Cash Equivalents: 119800 --> No Conversion Required
Current Liabilities: 30000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

Cash_R = (C/CL) --> (119800/30000)

Evaluating ... ...

Cash_R = 3.99333333333333

STEP 3: Convert Result to Output's Unit

3.99333333333333 --> No Conversion Required

FINAL ANSWER

3.99333333333333 ≈ 3.993333 <-- Cash Ratio

(Calculation completed in 00.004 seconds)

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Created by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

Vishnu K has created this Calculator and 200+ more calculators!

Verified by Kashish Arora

Satyawati College (DU), New Delhi

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LaTeX Go Current Ratio = Current Assets/Current Liabilities

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Average Collection Period using Receivables Turnover

LaTeX Go Average Collection Period = 365/Receivables Turnover Ratio

Cash Ratio Formula

LaTeX Go

Cash Ratio = (Cash and Cash Equivalents/Current Liabilities)
Cash_R = (C/CL)

What is Cash Ratio?

The cash ratio is a liquidity ratio that measures a company's ability to pay off its current liabilities solely with its cash and cash equivalents. It provides a more stringent assessment of short-term liquidity compared to other liquidity ratios because it excludes assets like accounts receivable and inventory, which may not be readily convertible to cash.
The cash ratio indicates the proportion of a company's current liabilities that can be covered by its cash and cash equivalents alone. A higher cash ratio suggests better short-term liquidity and a lower reliance on non-cash assets to meet short-term obligations. However, excessively high cash ratios may also indicate inefficient use of resources, as cash holdings generally do not generate returns as effectively as other investments. As with other financial ratios, it's important to consider industry benchmarks and trends when evaluating a company's cash ratio.

How to Calculate Cash Ratio?

Cash Ratio calculator uses Cash Ratio = (Cash and Cash Equivalents/Current Liabilities) to calculate the Cash Ratio, The Cash Ratio formula is defined as a liquidity ratio that measures a company's ability to pay off its current liabilities solely with its cash and cash equivalents. Cash Ratio is denoted by Cash_R symbol.

How to calculate Cash Ratio using this online calculator? To use this online calculator for Cash Ratio, enter Cash and Cash Equivalents (C) & Current Liabilities (CL) and hit the calculate button. Here is how the Cash Ratio calculation can be explained with given input values -> 3.993333 = (119800/30000).

FAQ

What is Cash Ratio?

The Cash Ratio formula is defined as a liquidity ratio that measures a company's ability to pay off its current liabilities solely with its cash and cash equivalents and is represented as Cash_R = (C/CL) or Cash Ratio = (Cash and Cash Equivalents/Current Liabilities). Cash and Cash Equivalents refer to assets that are readily convertible into cash and have a short-term maturity of typically three months or less from the date of purchase & Current Liabilities are the company debts or obligations that are due within one year.

How to calculate Cash Ratio?

The Cash Ratio formula is defined as a liquidity ratio that measures a company's ability to pay off its current liabilities solely with its cash and cash equivalents is calculated using Cash Ratio = (Cash and Cash Equivalents/Current Liabilities). To calculate Cash Ratio, you need Cash and Cash Equivalents (C) & Current Liabilities (CL). With our tool, you need to enter the respective value for Cash and Cash Equivalents & Current Liabilities and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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