Liquidity Ratio Analysis Calculator

Measure your company's ability to meet short-term obligations

Financial Data

Cash (in hand, in bank) ($)

Marketable Securities ($)

Accounts Receivable ($)

Current Assets ($)

Current Liabilities ($)

Liquidity Analysis

Current Ratio

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x

Current Assets / Current Liabilities

Quick Ratio

-

x

(Cash + Securities + Receivables) / Current Liabilities

Cash Ratio

-

x

(Cash + Securities) / Current Liabilities

Liquidity Position Visualization

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Current Ratio

-

Quick Ratio

-

Cash Ratio

Current Ratio

Quick Ratio

Cash Ratio

Financial Health Analysis

Industry Benchmarks

Comparison will appear here...

Liquidity Assessment

Assessment will appear here...

This calculator helps assess your company's short-term financial health. Higher ratios indicate better liquidity. Print Results

1. What Are Liquidity Ratios?

Liquidity ratios measure a company’s ability to pay short-term debts using its current or quick assets. These ratios are critical for:
✔ Creditors assessing repayment risk
✔ Investors evaluating financial health
✔ Management ensuring operational stability

Key Liquidity Ratios

Ratio	Formula	Ideal Benchmark
Current Ratio	$\frac{\text{Current Assets}}{\text{Current Liabilities}}$	1.5 – 3.0
Quick Ratio (Acid-Test)	$\frac{\text{Current Assets - Inventory}}{\text{Current Liabilities}}$	1.0 – 2.0
Cash Ratio	$\frac{\text{Cash + Marketable Securities}}{\text{Current Liabilities}}$	≥ 0.5

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2. How to Calculate Liquidity Ratios (Step-by-Step)

Example Data:

• Current Assets: $150,000

  • Cash: $30,000

  • Accounts Receivable: $50,000

  • Inventory: $70,000

• Current Liabilities: $75,000

A. Current Ratio

$$\text{Current Ratio}=\frac{150,000}{75,000}=\mathbf{\text{2.0}}$$

(Healthy: Assets cover liabilities 2x.)

B. Quick Ratio (Excludes Inventory)

$$\text{Quick Ratio}=\frac{150,000-70,000}{75,000}=\frac{80,000}{75,000}\approx \mathbf{\text{1.07}}$$

(Meets minimum safety threshold of 1.0.)

C. Cash Ratio (Most Conservative)

$$\text{Cash Ratio}=\frac{30,000}{75,000}=\mathbf{\text{0.4}}$$

(Below ideal 0.5; may struggle with immediate obligations.)

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3. How to Use a Liquidity Ratio Calculator

1. Input Current Assets → $150,000 (break down if needed).

2. Enter Current Liabilities → $75,000.

3. Select Ratios to Compute → Current, Quick, Cash.

4. Click "Calculate" → Get instant results.

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4. Interpretation of Results

Ratio	Value	Analysis
Current Ratio	2.0	Strong – Comfortable coverage.
Quick Ratio	1.07	Adequate – Can pay debts without selling inventory.
Cash Ratio	0.4	Risky – Insufficient cash for emergencies.

Actionable Insights:

• Improve cash reserves (e.g., reduce short-term spending).

• Speed up accounts receivable collection.

• Negotiate longer payment terms with suppliers.

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5. Industry-Specific Benchmarks

Industry	Current Ratio	Quick Ratio
Retail	1.5 – 2.0	0.8 – 1.2
Manufacturing	2.0 – 3.0	1.0 – 1.5
Tech (SaaS)	1.2 – 1.8	1.0 – 1.4

(Varies by sector; compare with peers.)

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6. Why Liquidity Ratios Matter

✅ Avoid Bankruptcy – Ensures debts can be paid on time.
✅ Secure Loans – Lenders prioritize high liquidity.
✅ Operational Flexibility – Funds for emergencies or opportunities.

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7. Limitations

⚠ Static Snapshot – Doesn’t predict future cash flows.
⚠ Ignores Timing – Some liabilities may be due sooner than assets convert to cash.