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Cash Ratio Calculator

LAST UPDATE: August 24th, 2018

Calculator

What is the Cash Ratio?

The Cash Ratio is a measurement of a firm’s ability to meet a short-term financial obligation.

Formula

Cash Ratio = (Cash + Marketable Securities) / Current Liabilities

Example

A company has cash of $3,000, marketable securities of $4,000, and current liabilities of $5,000.

Cash Ratio = ($3,000 + $4,000) / $5,000 = $7,000 / $5,000 = 1.4

Therefore, this company has a cash ratio of 1.4.

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