Liquidity ratios


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Liquidity ratios

Ratios that measure a firm's ability to meet its short-term financial obligations on time, such as the ratio of current assets to current liabilities.

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.
References in periodicals archive ?
Despite the tighter liquidity conditions in the banking system last year, the Bank's liquidity ratios continued to be sound and key ratios strengthened following good growth in customer deposits.
Conducted research that basically came down to calculating values of liquidity ratios was based on financial reports of companies, which was taken from Emerging Markets Information Service (EMIS).
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.
The new Basel Accord has stricter requirement for liquidity ratio, in the hope that financial institutions have sufficient liquidity to cope with emergent market situation, thereby boosting the stability of the financial system.
There are upward pressures on the FSR, but an increase in the rating would require liquidity ratios to strengthen further.
While the banking sector in Turkey generally posts extremely tight loan-based liquidity ratios and liquid asset ratios, KTKB's ratios are not only far better than the average, they are among the best in the sector - and in most cases are sound in a global context.
In line with the Basel III agreements, the Commission initially proposed an observation period prior to the introduction of the binding liquidity ratios, namely: the liquidity coverage ratio (LCR) that would oblige banks to hold high-quality liquid assets and would be introduced in 2015; and the net stable funding ratio (NSFR), which would encourage banks to make use of stable resources to finance their activities, and would be introduced in 2018 after a period of observation and review.
UAB's key liquidity ratios continue to be tighter than the peer group average, although there were improvements at end 2013, owing to strong growth in customer deposits, increased capital and a small amount of medium-term funds raised last year.
European banks and businesses have appealed to the EU executive to delay the introduction of legally binding liquidity ratios, which set the amount of cash banks have to hold to cover short-term and long-term debts.
FDU's liquidity ratios are at the low end of Fitch's medians of 41.
Liquidity Ratios - OM Group is more leveraged than its peer companies
Liquidity Ratios - Adams Golf is the most leveraged company amongst its competitors.