How it works
Cash ratio = (cash equivalents + readily marketable securities) / current liabilities.
Input definitions
- Cash and cash equivalents
- Enter the value in the labeled unit.
- Readily marketable securities
- Enter the value in the labeled unit.
- Current liabilities
- Enter the value in the labeled unit.
A worked example
- Cash and cash equivalents
- 30000
- Readily marketable securities
- 10000
- Current liabilities
- 80000
Assumptions & limits
Uses the accounting classifications, periods and policies you enter. Illustrative management-accounting model; it is not an audited statement, filing or determination of local accounting or tax compliance.
Sources & review
Maintained by AnsRio. Methods and examples use automated checks; this does not imply independent professional certification.
Method updated 2026-10-18. Content checked against the stated method and examples. Our verification approach.
Common questions
Are receivables included in the cash ratio?
No. This stricter liquidity measure excludes receivables and inventory. Check whether restricted cash should be excluded too.
How does Cash ratio work?
Cash ratio = (cash equivalents + readily marketable securities) / current liabilities.
What should I check before using Cash ratio?
Uses the accounting classifications, periods and policies you enter. Illustrative management-accounting model; it is not an audited statement, filing or determination of local accounting or tax compliance.