Cash Flow Liquidity Ratio

Quick Definition

Determines how successful a company can manage its short term debt.

Cash Flow Liquidity Ratio Formula

Cash and Cash Equivalents

 + 

Marketable Securities

 + 

Cash Flow from Operations

---

Total Current Liabilities

=

Cash Flow Liquidity Ratio

Try the calculator

 

Explanation of Cash Flow Liquidity Ratio

The Cash Flow Liquidity Ratio compares Cash and Cash Equivalents, Marketable Securities, and Cash Flow from Operations to the Total Current Liabilities of the company. This ratio measures how well a company can handle its Short Term Debt with its cash and other liquid assets

Importance of Cash Flow Liquidity Ratio

Many different things can affect this ratio both positively and negatively, as Total Current Liabilities make up several liabilities of the company. A steadily increasing Cash Flow Liquidity Ratio is desired.

Calculate Cash Flow Liquidity Ratio with our free online
Cash Flow Liquidity Ratio Calculator.

Tags: Financial Ratio

Get more information about Cash Flow Liquidity Ratio. Get our newest financial analysis ebook!

• Over 100 pages long
• 70 ratios
• Detailed explanations

• Examples with data samples
• Portable PDF format
• Bonus: 27 page glossary