Learn what is cash ratio and calculate it using the cash ratio formula to assess company’s ability to pay short-term debts with cash and cash equivalents.
The cash coverage ratio is a financial metric that measures a company’s ability to pay its interest expenses using the cash generated from its operating activities, without relying on external financing. It is an important indicator of a company’s liquidity, solvency, and overall financial health...
The current ratio is often classified as a liquidity ratio and a larger current ratio is better than a smaller one. However, a company’s liquidity is dependent on converting the current assets to cash in time to pay its obligations. Example of Current Ratio If a company’s current assets...
The payout ratio indicates the percentage of a corporation’s earnings which are distributed as cash dividends to its stockholders. Typically, the payout ratio is computed by using the per share common stock amounts. For example, if a corporation’s cash dividend per share of common stock for...
Discover what the quick ratio reveals about short-term liquidity and why it's crucial for evaluating a business's immediate financial health.
Lenders also use your loan-to-value ratio (LTV) to evaluate your eligibility for a cash-out refinance. Your LTV is the comparison of your mortgage amount to the value of your home. Some lenders won’t allow homeowners to exceed an 80% LTV to secure a cash-out refinance. Minimum home...
The formula to calculate the acid test ratio is:Acid Test Ratio = (Cash and Cash Equivalents + Current Receivables + Short-Term Investments) / Current LiabilitiesIf the balance sheet does provide a breakdown of the current assets, you can calculate the acid test ratio using the formula:Acid ...
What is the Cash Reserve Ratio Formula? If the current CRR rate is 5%, a bank is required to store 5% of the total Net Demand and Time Liabilities or NDTL in the form of cash. The bank is not allowed to use this money for investment or lending. ...
Cash flow is how much money is going in and coming out of a business over a certain period of time.
The times interest earned ratio measures how easily a business can meet its financial obligations. Learn how it works and how to calculate it