What is the Liquidity Ratio Calculator?

The Liquidity Ratio Calculator is a financial tool designed to help businesses, analysts, and accountants evaluate a company’s short-term financial health and its ability to meet immediate obligations. By entering current assets, inventory, cash and cash equivalents, and current liabilities, the calculator computes the Current Ratio, Quick Ratio, and Cash Ratio. These ratios give insight into how well a company can cover its liabilities using available resources, helping in effective cash flow management and financial decision-making.

How to Use:

1. Enter Current Assets (PKR): Include all assets that can be converted to cash within a year.
2. Enter Inventory (PKR): Include stock and raw materials that are part of current assets.
3. Enter Cash & Cash Equivalents (PKR): Input cash and highly liquid assets.
4. Enter Current Liabilities (PKR): Input obligations due within a year.
5. Click “Calculate”: The calculator computes the Current Ratio, Quick Ratio, and Cash Ratio.
6. Review Result: Each ratio is displayed along with its formula, allowing you to assess liquidity strength and make informed financial decisions.