Cash Ratio Calculator

Welcome to our Cash Ratio Calculator - Your tool for evaluating liquidity. Input Cash, Marketable Securities, and Current Liabilities, and our calculator will help you estimate the Cash Ratio.

This essential financial metric empowers you to make informed assessments of short-term liquidity and financial stability with precision.


Cash Ratio


Assessing Liquidity with the Cash Ratio Calculator


The Cash Ratio is a stringent measure of a company's liquidity in finance and accounting, assessing its immediate ability to pay off its current liabilities with cash and marketable securities. 

This calculator becomes an essential tool for investors and creditors to determine the short-term financial stability of a business.

How to Use the Cash Ratio Calculator

Calculating the cash ratio is a simple process:

  1. Input the Total Cash: This is the cash a company has on hand, including cash in bank accounts and petty cash.

  2. Enter Marketable Securities: These are liquid securities that can easily be converted into cash quickly, like treasury bills or short-term government bonds.

  3. Provide Current Liabilities: The company's liabilities are due within one year, found on the balance sheet.

  4. Calculate: By combining these figures, the calculator computes the cash ratio.

The formula is:

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

Real-World Example

Suppose 'Clearwater Tech', a technology firm, wants to evaluate its immediate liquidity levels. The company's balance sheet shows the following:

Using the Cash Ratio Calculator, the inputs would yield:

With a cash ratio 1.2, 'Clearwater Tech' has $1.20 in liquid assets for every $1 of current liabilities, indicating a good liquidity position.

The Formula

The calculation formula for the Cash Ratio is succinct:

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

This ratio gives a conservative view of a company's liquidity by considering only the most liquid assets.

Important Facts


The Cash Ratio Calculator provides a snapshot of a company's ability to cover its current liabilities with its most liquid assets. 

For financial analysts, investors, and the company's management, this ratio is crucial in assessing the risk associated with the company's financial obligations.

When interpreting the cash ratio, it is vital to consider industry norms, the company's historical ratios, and economic conditions. 

A financial advisor or accountant can offer tailored advice on maintaining an optimal cash ratio for business stability and strategic growth.

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