## What is Cash ratio

Cash Ratio is the ratio of a company’s cash and liquid assets to its current liabilities. The cash ratio is an indicator of a company’s liquidity that further refines both the current ratio and the quick ratio by measuring the amount of cash and cash equivalents. Potential creditors use this ratio in determining whether or not to make short-term loans. It is expressed as follows:

## Cash Ratio Formula

**Table of Contents**

**1) Liquidity Measurement Ratios: Introduction
2) Liquidity Measurement Ratios: Current Ratio
3) Liquidity Measurement Ratios: Quick Ratio
4) Liquidity Measurement Ratios: Cash Ratio**