Liquidity
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 US or Indian stocks by Cash Ratio.