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( Cash + Marketable Securities +
Cash Flow from Operating Activities )
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| Cash Flow Liquidity Ratio =
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Current Liabilities
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Explanation of Cash Flow Liquidity Ratio:
The Cash Flow Liquidity Ratio compares Cash, Marketable
Securities, and Cash Flow from Operations to the 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 Current Liabilities make up several liabilities of the
company. A larger Cash Flow Liquidity Ratio is desired.
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