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 ?
The sponsors' cash ratios are compared to the average of their peers' cash ratios using the following equation:
i] is the Cash Ratio Difference for sponsor i, [CR.
Bates found a positive association between his cash ratio (cash divided by total assets) and a market-to-book variable.
Notice that these groups of firms roughly coincide with those with the highest cash ratios.
Bates, Kahle, and Stulz (2009) show that the groups of firms with major increases in cash ratios are in industries with the highest increases in idiosyncratic volatility.
The CRO hiring firms are, on average, more levered, and have lower cash ratios.
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.
The ability of UR Corporation to pay current liabilities from its available cash is shown in its cash ratios.
A bank's structure and activities may measurably influence the composition of its asset portfolios, and the different levels of bank specialization may therefore partly explain the somewhat divergent patterns of cash ratios - and thus of capital expansion - of British and German banks.
Because these changes occurred around the time the Fed developed its payment services, this section examines the effects of the Fed's payment services on the cash ratios of state-chartered banks.
An even more conservative ratio is the Cash Ratio , which measures only a company's cash (including cash equivalents and short-term securities) against its current liabilities: (Cash + Cash Equivalents + Short-term Securities) / Current Liabilities.