cash ratio

(redirected from cash ratios)
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Related to cash ratios: Liquidity ratio

Cash ratio

The proportion of a firm's assets held as cash.

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.

cash ratio

A type of current ratio measure that compares a firm's cash and cash equivalents with its current liabilities. A firm's cash ratio is a demanding test of its liquidity. Compare quick ratio.

cash ratio

References in periodicals archive ?
Under this theory, the firm should have an optimal level of cash ratio, which balances the marginal benefits and marginal cost of holding cash.
The cash holdings are measured using continuous cash ratios or an indicator variable for whether the cash ratio is in the top quartile.
Cash ratios, Institutional Holdings percentages, and Insider Holdings percentages for all sample firms.
Bates found a positive association between his cash ratio (cash divided by total assets) and a market-to-book variable.
In addition, the correlation in the cross section of firms is weak, indicating that firms with higher cash ratios are not necessarily those that are more active in foreign operations.
Financial characteristic include the firm's leverage, cash ratio, operating cash flow volatility, and tax convexity.
In opting for highly liquid balance sheet items, mainly the cash and balances with SAMA and the due from banks, Saudi banks held their cash ratio at a comfortable 10 percent by the end of Q3, 2010 as well as striking a five-year high minimum risk assets ratio at 32.8 percent for 2009, reflecting continued risk averseness.
On the other hand, firms increase their current asset ratios not only with higher debtor and cash ratios, but with higher stock ratios, which is very important because it could suggest that housing companies own an important problem of oversupply.
The percentage of AM Corporation available cash to cover its current liabilities is shown in its cash ratios. AM Corporation's cash ratios in 2004 and 2005 were more than 100%.
Cash ratios (%) 1998 1999 2005 2006 2007 Cash-flow coverage ratio 43.9 59.9 89.1 90.5 88.7 Sales to operating cash ratio 9.4 11.0 8.7 8.8 9.1 Source: The Bank of Korea Korea's corporate bankruptcy ratio dropped drastically to 0.03 percent during the first nine months of 2008 from 0.40 percent during 1997.
Japanese stocks that 1) have no research "coverage" by the Street because their market capitalization is too small, 2) trade at PBRs well under 1.0X, 3) have good technology or business models, and 4) trade at net cash ratios that are less than their market capitalization are thus the probable targets of these new "absolute return" funds and thus should be identified and closely watched.