Cash Ratio Calculator

Jun 10, 2018 0 Comments

Cash Ratio Calculator is tool that finds out the ability to use cash and the cash equivalents. To pay its current liabilities, it is an indicator of company's short-term liquidity

Cash Ratio:
Background Information

What does Cash Ratio mean?
Cash ratio is the ratio of cash and cash equivalents of a company to its current liabilities. It measures the ability of a business to repay current liabilities by only using the cash and cash equivalents.
Cash Ratio = Cash + Cash Equivalents/Current Liabilities

A company called ‘ZIMA’ has following assets and liabilities at the year ended December 31, 2017:-

Marketable Securities12,000
Accounts receivable$17,874
Accounts Receivable56,200
Prepaid Insurance9,000
Total Current Liabilities73,780

According to the formula, Cash Ratio is:-

  • = (34,390 + 12,000) / 73,780
  • = 46,390 / 73,780
  • = 0.63

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Jun 10, 2018
Tool Launched