Cash ratio is a ratio that shows how much cash and near-cash assets a company has to pay off its current liabilities. It helps to measure how liquid a company is and how easily it can meet its short-term obligations. The formula for cash ratio is:
Cash ratio = (Cash and Near Cash Items + Marketable Securities & Other Short-Term Investments) / Current Liabilities
Where:
- Cash and Near Cash Items is BS002,
bs_cash_near_cash_item
- Marketable Securities & Other Short-Term Investments is BS003,
bs_mkt_sec_other_st_invest
- Current Liabilities is BS050,
bs_cur_liab