Financial Ratios

Cash Ratio

Definition

What is Cash Ratio?

Cash and cash equivalentsCash plus highly liquid short-term investments with insignificant value-change risk. divided by current liabilitiesObligations expected to be settled within the normal operating cycle or about one year..

Example in practice

How This Looks in Practice

₦300 million cash against ₦600 million current liabilities gives a 0.5 cash ratio.

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Related Terms

Financial Ratios

Gross Margin

Gross profit expressed as a percentage of revenue.

Financial Ratios

Operating Margin

Operating profit expressed as a percentage of revenue.

Financial Ratios

EBITDA Margin

EBITDA expressed as a percentage of revenue.

Equity Valuation

Earnings Per Share

Net income attributable to ordinary shareholders divided by weighted average ordinary shares.

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