Cash Ratio Calculator

About this calculator

The cash ratio divides cash and cash equivalents (bank balances, money market funds, short-term Treasury bills) by current liabilities: Cash Ratio = (Cash + Cash Equivalents) ÷ Current Liabilities. Unlike the current ratio or quick ratio, it excludes receivables and inventory entirely, asking only whether a company could pay off its near-term obligations using money it already has in hand.

Credit analysts and lenders use it as a worst-case stress test — a ratio above 1.0 means a company could clear all current liabilities today without collecting a single invoice or selling any stock. Because holding large amounts of idle cash is inefficient, most healthy companies run a cash ratio well below 1.0 and rely on receivables and short-term credit lines instead.