Cash asset ratio

(redirected from Working Capital 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 new funds will enable Mushrif to reduce its balance sheet debt, improve working capital ratios and support the creation of strategic partnerships where appropriate, the company statement said.
The new funds will be utilised to reduce balance sheet debt, improve working capital ratios and support the creation of strategic partnerships where appropriate.
The tools used to analyze this are the individual working capital ratios, and the overall working capital conversion cycle or the days of working capital.
This could reduce working capital ratios for the current portion of the lease obligations.
Cash flows remain carefully managed and working capital ratios are now in line with long run objectives.
While Rehman (2006) studied the impact of the different variables of working capital management including Average Collection Period, Inventory Turnover in Days, Average Payment Period and Cash Conversion Cycle on the Net Operating Profitability of firms and concluded that there was a strong negative relationship between above working capital ratios and profitability of firms.
White Young Green, the planning and construction consultancy company, which has a major Birmingham office, said it expected full-year pretax profits before amortisation to be in line with internal expectations as its margins were stronger, working capital ratios had improved and its order book stood at record levels.
Operating and financial results can be affected by market conditions resulting in revenues deviating from projections which may result in increased operating expenses, additions to reserve positions, lower gross margins, higher working capital ratios.
Creditors and lenders began using cash flow ratios because those ratios give more information about a company's ability to meet its payment commitments than do traditional balance sheet working capital ratios such as the current ratio or the quick ratio.
Bruker intends to generate further efficiency gains and expense reductions, as well as reductions in working capital ratios, and we will also pursue selective best-cost sourcing of non-core activities.
With the exception of lower cash balances due to share repurchase, working capital ratios remain consistent with the prior year.