# The cash ratio is a financial ratio that measures a company’s ability to pay its short-term liabilities with its cash and cash equivalents.

. What is the Cash Ratio?

The Cash Ratio is a financial ratio that measures a company's ability to pay its short-term obligations with its liquid assets. Does cash ratio include inventory? No, the cash ratio does not include inventory. The cash ratio is a liquidity ratio that measures a company's ability to pay its short-term obligations with its most liquid assets. Liquid assets include cash and cash equivalents, which exclude inventory. What is cash-on-cash return example? The cash-on-cash return is a metric used to assess the profitability of an investment. The cash-on-cash return is calculated by dividing the cash flow from the investment by the total amount of cash invested.

For example, if an investor invests \$100,000 in a property and receives \$10,000 in annual cash flow from the investment, the cash-on-cash return would be 10%.

##### What is IRR vs cash on cash?

The internal rate of return (IRR) is a metric used in capital budgeting to estimate the expected return of an investment. The IRR is the rate at which the present value of the investment's cash flows equals the initial investment.

Cash on cash (CoC) is a metric used to evaluate the cash flow of an investment. The CoC is the ratio of the cash flow from an investment to the initial investment.

What are cash assets? Cash assets are current assets that can be converted into cash within a short period of time, typically within one year. Cash assets include cash and cash equivalents, short-term investments, and accounts receivable.

The main purpose of classifying assets as cash assets is to provide a measure of a company's liquidity, or its ability to pay its short-term obligations. Because cash assets can be quickly converted into cash, they are a key component of a company's working capital.

Working capital is the difference between a company's current assets and current liabilities. It is a measure of a company's short-term financial health and is used to finance day-to-day operations.

A company's current assets are its most liquid assets, which are assets that can be quickly converted into cash. Current assets include cash and cash equivalents, short-term investments, and accounts receivable.

A company's current liabilities are its obligations that are due within one year. Current liabilities include accounts payable, short-term debt, and accrued expenses.

The working capital ratio is a measure of a company's liquidity and is calculated by dividing a company's current assets by its current liabilities. A high working capital ratio indicates that a company has a strong ability to pay its short-term obligations.

##### What is cash percentage?

The cash percentage is a financial ratio that measures the percentage of a company's total assets that are in the form of cash and cash equivalents.

This ratio is a useful tool for investors to assess a company's liquidity, or its ability to pay its short-term obligations.

A company with a high cash percentage is typically considered to be more liquid than a company with a low cash percentage.