Cash Ratio Calculator

It is a very important financial metric for those who provide short-term credit facilities to the company. And the cash ratio calculator helps such lenders and investors in analyzing the capacity of the company to meet the timely payment requirements for such short-term credit facilities. Further, it includes creditors supplying goods on credit, lenders of short-term funds, or the people whose payment is yet to be made. Moreover, the cash ratio determines whether the company has sufficient cash to make payment to its creditors.

The formula for calculating the cash ratio is:

Cash Ratio = Cash and Cash Equivalents / Current Liabilities

Cash Ratio Calculator

How to Calculate using Calculator?

The cash ratio calculator only requires the user to enter the following data:

Cash and Cash Equivalents – Enter the amount of cash and cash equivalents available with the firm. It includes all the cash available with the company in hand and at the bank and all the securities and investments that are highly liquid and can easily convert into cash.

Current Liabilities – Current liabilities are the short-term liabilities of the company for carrying out daily operations. And company held these for up to a period of 12 months. It includes trade payables, outstanding expenses, short-term borrowings, overdrafts, and other liabilities for a period of less than 12 months.

To know more about the cash ratio, refer to the cash ratio

Sanjay Borad

Sanjay Bulaki Borad

MBA-Finance, CMA, CS, Insolvency Professional, B'Com

Sanjay Borad, Founder of eFinanceManagement, is a Management Consultant with 7 years of MNC experience and 11 years in Consultancy. He caters to clients with turnovers from 200 Million to 12,000 Million, including listed entities, and has vast industry experience in over 20 sectors. Additionally, he serves as a visiting faculty for Finance and Costing in MBA Colleges and CA, CMA Coaching Classes.

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