Cash Ratio Calculator

Liquidity

Updated Apr 2026 • Has calculator

The strictest liquidity measure — cash and equivalents divided by current liabilities.

Calculate Cash Ratio

Cash & Cash Equivalents

Cash and cash equivalents only (exclude short-term investments), in millions of USD

Current Liabilities

Total current liabilities in millions of USD

Cash Ratio

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Not investment advice.

What is Cash Ratio?

The Cash Ratio is the most conservative liquidity metric, comparing only cash and cash equivalents to current liabilities. It answers a worst-case question: could the company pay off all its current obligations immediately using only cash on hand? A ratio above 1.0 is rarely seen outside of special situations; most healthy companies maintain a ratio well below 1.0 because holding excessive idle cash is inefficient. It is most useful during financial distress analysis or when evaluating a company's ability to survive a sudden loss of credit access.

Formula

Cash Ratio = Cash & Equivalents ÷ Current Liabilities

Worked Example

FY2024

Step 1 Cash and cash equivalents: $29,943M

Step 2 Current liabilities: $176,392M

Step 3 Cash Ratio = $29,943M ÷ $176,392M = 0.17x

Step 4 → Apple holds $0.17 in cash per $1.00 of current liabilities — typical for a company with strong free cash flow

Source: Apple 10-K FY2024 (2024-11-01)

How to Interpret Cash Ratio

< 0.1

Very Low — relies heavily on receivables and credit

0.1 – 0.5

Typical — most cash-efficient businesses operate here

0.5 – 1

Conservative — ample cash cushion

> 1

Very High — could cover all current liabilities with cash

📚 Leverage & Liquidity — Complete the path

Sources