liquidity ratio


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Related to liquidity ratio: Activity Ratio, Solvency Ratios

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.

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.

liquidity ratio

1. A measure of a company's ability to meet its short-term obligations achieved through a comparison of financial variables. See also current ratio, quick ratio, working capital.
2. The value of trading in a stock that is required to change the stock's price by 1%. A high ratio indicates the stock has considerable liquidity. A stock's liquidity ratio is of primary importance to institutions and traders that deal in large volume and that wish to avoid securities with a lack of liquidity.

liquidity ratio

see CURRENT RATIO.

liquidity ratio

see RESERVE-ASSET RATIO.
References in periodicals archive ?
Since the introduction of the new liquidity ratio, outstanding treasury bills, which are the most liquid assets, are growing at an average monthly rate of 2.
Analyzing the fifth indicator, we can say that the average values of cash liquidity ratio during the period are in the range of 0,67-1,56.
As with the liquidity ratios, the EP wishes to include these two ratios in the legislative text immediately and to apply them through delegated acts later, in 2017.
Taipei, July 16, 2012 (CENS) -- The Financial Supervisory Commission (FSC) plans to follow the new version of Basel Capital Accord and introduce two new standards for the liquidity ratios of financial institutions, which will entail stricter definitions for qualified liquid assets.
From October, the minimum liquidity ratio for banks will be 10 percent.
The central bank said that the liquidity ratio of most of the banks and lending institutions in Taiwan were already above 10 percent.
Similarly, reserve accumulation, combined with the reduction of debt service achieved through the government's debt reprofiling operations, boosted Peru's liquidity ratio to 214% at the beginning of 2006.
This, combined with low debt service, will boost Guatemala's liquidity ratio to a projected 187% at the beginning of 2006 compared with a median of 157% for 'BB'-rated sovereigns.
Capital adequacy and liquidity ratios would also need to be maintained at their current strong levels.
Customer concentrations in both loans and deposits and tighter than sector-average liquidity ratios are constraints.
Liquidity ratios exceed Fitch's medians for the rating category with 366.
In the previous report on the Bank, a 'Positive' Outlook had been appended to its FSR in view of the positive trend in liquidity ratios and the expectation of rising net profitability.