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Cash Ratio System The cash ratio is usually a far more conservative check out a corporation's power to protect its debts and obligations compared to other liquidity ratios. It sticks strictly to cash or cash-equivalent holdings, leaving other assets like accounts receivable out from the equation.
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What Cash Ratio Can Tell You The cash ratio is mostly utilised being a measure of an organization's liquidity. This metric shows the business's capability to fork out all present liabilities instantly while not having to offer or liquidate other assets.
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