Cash asset ratio

(redirected from Current Ratios)
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Related to Current Ratios: Quick ratio, Acid Test Ratios

Cash asset ratio

Cash Asset Ratio

A ratio of a company's cash and liquid assets to its total liabilities. A cash asset ratio measures a 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 current ratio.
References in periodicals archive ?
The variance of the Current Ratio is much greater in the Small Companies group.
For example, Kristy (1994) reviewed 14 popular financial ratios and developed a standard Current Ratio of 2 to 1 and a Debt Ratio of .
For electronics equipment companies, SIC #s 3600-3699, the D&B published median standards for the Current Ratio of 0.
In this week's screen, we'll use the Current Ratio as the main focus and add other logical items to produce a stock list of sound companies with solid prospects for the future.
Current Ratio greater than median for its respective X Industry
CHICAGO -- Kevin Matras explains how to use the Current Ratio as a financial health barometer.
Exhibit 2 shows trends in the current ratios for the two companies, while Exhibit 3 shows CCC trends.
The current ratio and its variations are most commonly used to assess a company's liquidity, but these measures do not incorporate the element of time.
Explain why it is not surprising that the two Table 1 firms with the smallest differences between their current ratios and quick ratios are Brinker and Southwest Airlines.
In fact, in light of these firms' insignificant inventory amounts, the adequacy of their current ratios is best judged by examining desired threshold levels for quick ratios.
However, even if the credits are only 10% of the outstanding balances, a current ratio can be easily brought from 2.
In this case the current ratio is 3, although the ratio should be based on 10/4 or a ratio of 2.

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