Liquidity using only cash & equivalents. The Cash Ratio Calculator takes cash and bank balances, marketable securities, current liabilities and returns cash ratio plus liabilities not covered by cash. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Financial ratios are only useful in comparison: against last year, against a competitor, or against the benchmark for your industry. Take the figures from the same set of accounts, note whether they are yearly or monthly, and read each ratio alongside the others in its family. Use the worked example below to check the maths against your own figures.
How the Cash Ratio Calculator works
The strictest liquidity test: only cash and near-cash count. Below 0.5 is common and acceptable for trading businesses; above 1 means every short-term bill could be paid today.
Worked example
With the example values (cash and bank balances of $80,000, marketable securities of $20,000, current liabilities of $150,000), the cash ratio is 0.67x; liabilities not covered by cash $50,000.00. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is cash ratio calculated?
cash ratio = (cash + marketable securities) ÷ current liabilities.
Which figures do I need?
Cash and bank balances, marketable securities, current liabilities. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
What is a good value for this ratio?
Benchmarks differ by industry, size and business model, so compare with companies like yours and with your own history. A ratio moving in the wrong direction for several periods matters more than any single number.
