Cash asset ratio

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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 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.
In assessing company liquidity, the most commonly used measure is the current ratio and its variations, such as the quick/acid-test ratio.
Furthermore, financial statement users cannot ascertain what a company's current ratio was even the day before the financial statement date.
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.
In the sixth pairing, two supermarkets with practically identical current ratios had, nevertheless, dramatically different ratios of operating cash flow to current liabilities.
Our research findings strongly support the contention that systematic differences exist among the Current Ratios and Dept Ratios for Small Companies versus Large Companies.
We examined the Current Ratio (current assets/current liabilities), a measure of liquidity, and the Debt Ratio (total liabilities/total assets), a measure of solvency, for two large sets of public companies categorized as Small Companies and Large Companies.
You can also take it a step further by using the Research Wizard to screen for companies with Current Ratios that are better (i.
CHICAGO -- Kevin Matras explains how to use the Current Ratio as a financial health barometer.
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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