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 ?
In particular, we take into account the target's and the bidder's market-to-book ratio of equity, the cash ratio, the debt ratio, profitability, and R&D intensity.
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.
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.
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 ability of UR Corporation to pay current liabilities from its available cash is shown in its cash ratios.
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.
Auditing textbooks commonly include only ratios based on the balance sheet and income statement with little or no discussion of cash ratios.
Though neither the British nor the German banks were bound by minimum reserve requirements in the pre-World War I period, cash ratios often still depended on factors outside the banks' control.
Fed payment services may have permitted banks to operate with lower cash ratios for the following reasons.