How do you calculate the cash ratio?
The cash ratio measures the cash and cash equivalents of a company. It is regarded as the most conservative liquidity ratio as it measures only cash and cash equivalents. All other current assets are excluded from this formula.
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How do you calculate the current ratio?
The current ratio indicates the number of times current assets will exceed current liabilities to measure short-term solvency. This is a ratio that will help determine whether a firm has the ability to meet its short-term obligations.