# Cash Ratio Calculator

URL: https://speedycalculator.com/calculators/finance/cash-ratio/
Last updated: 2026-10-25

> The cash ratio calculator works out the strictest liquidity ratio – cash and marketable securities divided by current liabilities – showing whether a company could pay its short-term obligations immediately.

## Inputs

- Cash
- Cash equivalents
- Marketable securities
- Current liabilities

## Results

- Cash ratio
- Interpretation

## Formula

```
Cash ratio = (cash + cash equivalents + marketable securities) ÷ current liabilities
```

## Explanation

Unlike the current and quick ratios, the cash ratio ignores receivables and inventory. Most healthy companies have a cash ratio below 1 because holding too much cash is inefficient.

### How to use the Cash Ratio Calculator

- **Cash**
- **Cash equivalents**
- **Marketable securities**
- **Current liabilities**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter cash, cash equivalents, marketable securities and current liabilities.

### Tips

- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.

### Common mistakes to avoid

- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.

### Inputs explained

FieldWhat to enterCashAmount in your currencyCash equivalentsAmount in your currencyMarketable securitiesAmount in your currencyCurrent liabilitiesAmount in your currency

### Example values

How the main result changes when **Cash** changes and everything else stays at the example values above:

CashCash ratio60,0000.490,0000.475120,0000.55150,0000.625180,0000.7240,0000.85

## Worked example

Inputs — Cash: $120,000; Cash equivalents: $40,000; Marketable securities: $60,000; Current liabilities: $400,000.

Results — **Cash ratio = 0.55**; Interpretation = Moderate cash cover.

## FAQ

**What is a good cash ratio?**
0.5–1 is common; above 1 means more cash than current liabilities.

**How is it different from the quick ratio?**
The quick ratio also counts receivables.

**Is a very high cash ratio good?**
It's safe but may mean cash isn't being used productively.

**What formula does the Cash Ratio Calculator use?**
Cash ratio = (cash + cash equivalents + marketable securities) ÷ current liabilities.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)