Calculate the cash ratio, a liquidity ratio that measures a company’s ability to pay off its short-term liabilities with its cash and cash equivalents.

The cash ratio is calculated by dividing the sum of cash and cash equivalents by current liabilities. It provides insight into a company’s immediate ability to cover its short-term obligations using its most liquid assets.

The formula is as follows:

\[\text{Cash Ratio} = (\text{Cash and Cash Equivalents} + \text{Short Term Investments}) / \text{Current Liabilities}\]

Also known as: most conservative liquidity ratio.

No programming experience? With the Finance Toolkit MCP server, AI assistants such as Claude and ChatGPT can calculate the Cash Ratio for you. Just ask in plain English.

Calculate the Cash Ratio in Python

The Cash Ratio is available in the Ratios module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_cash_ratio as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

cash_ratios = toolkit.ratios.get_cash_ratio()

Which returns:

  2021 2022 2023 2024 2025
AAPL 0.4992 0.3137 0.4236 0.3695 0.3302
TSLA 0.8986 0.8306 1.012 1.2686 1.3893

Parameters

get_cash_ratio accepts the following parameters:

  • rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
  • growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
  • lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
  • standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
  • trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.
Current Ratio Quick Ratio Working Capital Operating Cash Flow Ratio Operating Cash Flow Sales Ratio Short Term Coverage Ratio Defensive Interval Ratio

The Ratios module page introduces the module, and the sidebar lists all of its functions.

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