What is Cash Ratio?
The cash ratio is the most conservative liquidity measure — showing only cash and cash equivalents relative to current liabilities, ignoring receivables and inventory.
Formula
Cash Ratio = Cash & Cash Equivalents ÷ Current Liabilities
How to Interpret
Shows the ability to pay off debts immediately without selling anything. Very conservative; most companies have ratios well below 1.
Typical Ranges
0.2-0.5 for most companies. Above 1.0 may indicate excess idle cash.
Find Stocks Using This Metric
Use the Equiscale Stock Screener to filter Indian stocks by Cash Ratio.
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