Retirement Business Cash Ratio Calculator[CP_CALCULATED_FIELDS id=”9″] Cash Ratio Explanation
Interpretation of Cash Ratio
If your cash ratio is 1.00 or above that means that you should be able to pay all your short-term debts (current liabilities) like vendors. Creditors like a high number. However, having a high number means that you have idle cash on hand which is not generating profits. Most businesses have a cash ratio below 1.00.
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