Cash Ratio Calculator – Instantly Analyze Your Liquidity
Use our free Cash Ratio Calculator to quickly measure your company’s ability to pay off its current liabilities using only cash and cash equivalents. This financial health indicator is crucial for businesses, investors, and finance professionals seeking to understand liquidity without relying on inventory or accounts receivable.
📘 What is the Cash Ratio?
The cash ratio is a conservative liquidity metric that shows how much of a company’s short-term debt can be covered by its most liquid assets—cash and marketable securities. It is calculated using the formula:
Cash Ratio = (Cash + Cash Equivalents) ÷ Current Liabilities
🧮 Cash Ratio Calculator
📊 Why is the Cash Ratio Important?
- ✅ Evaluates short-term financial stability
- ✅ Helps investors analyze business solvency
- ✅ Useful for budgeting and emergency planning
- ✅ Crucial for risk management in downturns
💬 Frequently Asked Questions (FAQs)
Q: What is a good cash ratio?
A cash ratio of 1.0 or higher indicates your business can cover all short-term liabilities with cash on hand.
Q: How is the cash ratio different from the current or quick ratio?
Unlike the current or quick ratio, the cash ratio includes only cash and cash equivalents. It’s the most conservative measure of liquidity.
Q: Is this calculator suitable for personal use?
Yes! You can use it to compare your emergency fund against monthly obligations.
Q: Do I need to download or register?
No – this calculator is 100% browser-based, free, and requires no login.