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Cash Ratio

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Cash ratio
The proportion of a firm's assets held as cash.

cash ratio
A type of current ratio measure that compares a firm's cash and cash equivalents with its current liabilities. A firm's cash ratio is a demanding test of its liquidity. Compare quick ratio.

Cash Ratio
1. A ratio of a company's cash and liquid assets to its total liabilities. A cash ratio is a measure of company's liquidity and how easily it can service debt and cover short-term liabilities if the need arises. As a result, potential creditors use this ratio in determining whether or not to make short-term loans. It is also called the liquidity ratio and the cash asset ratio.

2. In banking, a ratio of a bank's cash and cash equivalents to its demand deposits. See also: Reserve requirement.


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The cash ratio in any good S&P index fund tends to fluctuate between zero and about 0.
HOW TO USE CASH RATIOS AS A MEASURE OF FINANCIAL HEALTH
The per share cash amount is based on the estimated cash ratio of 0.
 
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