Enter the total cash and cash equivalents along with the current liabilities into the calculator. The calculator will evaluate and display the cash ratio of the business.

- Actual Cash Value Calculator
- Free Cash Flow Calculator
- Debt to Equity Ratio Calculator
- Net Cash Flow Calculator

## Cash Ratio Formula

The following formula can be used to calculate the cash ratio of a business.

CR = C / CL

- Where CR is the cash ratio
- C is the cash and cash equivalents
- CL is the current liabilities.

## Cash Ratio Definition

A cash ratio is a financial measure of how “liquid” or solvent a business is. In other words, how much cash a business has relative to it’s liabilities. A larger cash ratio means a company has a greater amount of cash to work with respect to it’s liabilities. This typically means the business is more profitable.

## Cash Ratio Example

How to calculate a cash ratio?

**First, determine the total cash.**Calculate the total cash and cash equivalents of a business.

**Next, determine the current liabilities.**Calculate the current liabilities owned by the company.

**Finally, calculate the cash ratio.**Using the formula above, calculate the cash ratio.

## FAQ

**What is a cash ratio?**

A cash ratio is the ratio of cash and cash equivalents to the total cost of liabilities that a company owns. This ratio is used to measure liquidity in a company.

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