Cash Ratio Calculator | Cash and Cash Equivalents Ratio

Cash Ratio Calculator: calculate cash ratio from cash and current liabilities, or solve for a missing value.

This cash ratio calculator measures the most conservative form of short-term liquidity by comparing cash and cash equivalents with current liabilities. It can also solve for a missing input when the other two values are known.

Cash ratio is stricter than the current ratio or quick ratio because it ignores receivables and inventory. That makes it useful for stress testing, lender review, and liquidity analysis where immediate payment capacity matters.

Cash Ratio

$$\text{Cash and Equivalents} = \text{Cash Ratio} \times \text{Current Liabilities}$$

$$\mathrm{Cash} = \mathrm{CR} \times \mathrm{CL}$$

$$\text{Current Liabilities} = \frac{\text{Cash and Equivalents}}{\text{Cash Ratio}}$$

$$\mathrm{CL} = \frac{\mathrm{Cash}}{\mathrm{CR}}$$

$$\text{Cash Ratio} = \frac{\text{Cash and Equivalents}}{\text{Current Liabilities}}$$

$$\mathrm{CR} = \frac{\mathrm{Cash}}{\mathrm{CL}}$$

Initial Data

Cash and Equivalents

Current Liabilities

Cash Ratio

Cash and Cash Equivalents typically include physical currency, checks, and bank deposits that are readily accessible for use, and also short-term, highly liquid investments that are easily convertible into cash and have a maturity period of three months or less.

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Cash Ratio Calculator FAQ

What is cash ratio?
Cash ratio compares cash and cash equivalents with current liabilities. It measures how much of short-term obligations could be covered immediately with the most liquid assets.

What is the cash ratio formula?
Cash ratio = Cash and cash equivalents / Current liabilities. This calculator can also solve for cash or current liabilities.

How is cash ratio different from current ratio and quick ratio?
Cash ratio is the strictest of the three. Current ratio uses all current assets, quick ratio excludes inventory, and cash ratio focuses only on cash and near-cash assets.

Is a high cash ratio always good?
Not necessarily. A very high cash ratio may indicate strong liquidity, but it can also suggest idle cash that is not being deployed productively.

How should I interpret cash ratio?
A higher cash ratio means stronger immediate liquidity, but it is a very conservative measure. A low cash ratio does not automatically mean distress if the business has strong collections, inventory turnover, or committed financing.

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Cash Ratio

Initial Data

See also:

Profitability Ratios

Liquidity & Solvency Ratios

Debt Ratios

Market Ratios

Cash Ratio Calculator FAQ

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