The cash ratio meaning refers to a liquidity metric that assesses a company’s ability to cover its short-term liabilities using only its most liquid assets, specifically cash and cash equivalents. It is calculated by dividing cash and cash equivalents by current liabilities. A higher cash ratio indicates a stronger liquidity position, while a lower ratio may suggest potential liquidity challenges. This ratio is crucial for evaluating a company’s financial health and short-term solvency.
CMA Prep Course
CMA Exam Academy is a proven, 16-week per part online coaching program to help you pass the CMA. The Academy’s comprehensive curriculum will help you pass the CMA exam and achieve your dreams of earning 6-figures per year, ascend to the executive ranks and earn the respect from your peers.
