# Cash ratio

> Cash ratio is a liquidity and working-capital metric, calculated as Cash and equivalents ÷ Current liabilities. Most conservative.

Source: https://lopifi.com/glossary/cash-ratio
Part of: Lopifi — US GAAP books on autopilot, reviewed by a CPA (https://lopifi.com)

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**What is cash ratio?** Cash ratio is a liquidity and working-capital metric, calculated as Cash and equivalents ÷ Current liabilities.

## Formula

`Cash and equivalents ÷ Current liabilities`

## Note

Most conservative

- **Category:** Liquidity & working capital
- **Specified in:** [Metric definitions](https://lopifi.com/md/docs/domain/10-metrics)