Cash Ratios

  1. Operating Cash Index
    Are we doing a good job of collecting cash when we make sales?

    HIGHER is better
  2. Cash Ratio
    • How much very liquid assets do we
    • have available to pay CL? (Note: She is including both short term and long term investments in this ratio.)

    How close this is to the quick ratio will tell you the impact our receivables have on our ability to pay CL as they become due.

    Close to Quick Ratio
  3. Cash Turnover Ratio
    How many times was the investment in cash realized in sales?

    HIGHER is better
  4. Cash flow Ratio
    Is organization generating enough cash from operations to meet current obligations?

    HIGHER is better
  5. Cash to Cash Dividends
    Is organization generating enough cash to meet dividend obligations?

    HIGHER is better
  6. Cash Flow Adequacy Ratio
    Is organization generating enough cash from operations to grow and keep investors happy?

    HIGHER is better
  7. Depreciation Impact Ratio
    How much of the difference between net income and cash flow from operations is due to depreciation expense?

    LOWER is better
  8. Percentage of Fixed Asset Depreciation
    How old are the fixed assets? Is the company going to need to spend major amounts of cash to replace fixed assets in the next few years?

    • Gross Depreciable Fixed Assets =
    • Net Fixed Assets + Accumulated Depreciation – Land

    LOWER is better
Card Set
Cash Ratios