There are other liquidity measures that can be used as an alternative to the cash ratio, including the current ratio and the quick ratio.
The cash ratio is a liquidity ratio that measures a company's ability to pay off all of its current liabilities with only its cash and cash equivalents. Since the cash ratio only allows for current liabilities to be paid with cash and cash equivalents, it's the most restrictive of the three liquidity ratios. The equation for the quick ratio is as follows:
Cash ratio = (cash + cash equivalents) / total current assets
The quick ratio is one of two alternatives a company can use in place of its cash ratio and measures a company's ability to pay off all of its current liabilities with cash and cash equivalents, as well as other highly liquid current assets. The quick ratio factors in a company's accounts receivables and other liquid current assets when assessing its ability to pay off its current liabilities, but does not include illiquid current assets, such as inventory. The two equations for the quick ratio are as follows:
Quick ratio = (cash + cash equivalents + accounts receivable) / total current assets
Quick ratio = (total current assets  inventory) / total current assets
The other alternative to the cash ratio is the current ratio. The current ratio measures a company's ability to pay off all of its current liabilities with its total current assets. It doesn't take into account the liquidity of its individual current assets, and assumes all current assets can be used to pay off its current liabilities. The equation for the current ratio is as follows:
Current ratio = (current assets) / (current liabilities)

To what extent should you take a company's liquidity ratio into account before investing ...
Find out how important it is for an investor to know a company's liquidity ratio before deciding to invest, and why relying ... Read Answer >> 
What is the formula for calculating the quick ratio in Excel?
Understand the basics of the quick ratio, including how it is used as a measure of a company's liquidity and how to calculate ... Read Answer >> 
Is there a downside to having a high liquidity ratio?
Find out why it might be disadvantageous for a company to have liquidity ratios that are too high, and learn how to find ... Read Answer >> 
What does the operating cash flow ratio measure?
Learn about the operating cash flow ratio, how the ratio is calculated and what it indicates about a company. Read Answer >> 
What metrics can be used when evaluating a telecommunications company to ensure its ...
Learn about some common and useful cash flow accounting ratios that investors can use to evaluate companies in the telecommunications ... Read Answer >>

Investing
Dynamic Current Ratio: What It Is And How To Use It
Learn why this ratio may be a good alternative to the current, cash and quick ratios. 
Investing
Financial Ratios to Spot Companies Headed for Bankruptcy
Obtain information about specific financial ratios investors should monitor to get early warnings about companies potentially headed for bankruptcy. 
Investing
Useful Balance Sheet Metrics
These metrics can help you better understand the information found on balance sheets. 
Investing
Financial Analysis: Solvency vs. Liquidity Ratios
Solvency and liquidity are equally important for a company's financial health. 
Investing
Key Financial Ratios to Analyze Airline Companies
Examine some of the most important financial ratios and performance metrics investors use to evaluate companies in the airline industry. 
Investing
SXC Health Solutions Corp. (USA) Among the Nasdaq's Biggest Movers
The market is having a bad day so far: the Nasdaq is trading down 0.3%; the S&P 500 has declined 0.4%; and the Dow has slipped 0.5%. The Nasdaq Composite Index is a capitalizationweighted index, ... 
Investing
WalMart's 5 Key Financial Ratios (WMT)
Identify the five key financial ratios that fundamental analysts use to evaluate WalMart's financial position and determine if its stock is a good buy. 
Investing
Analyzing General Electric's Debt Ratios in 2016 (GE)
Evaluate GE's debt picture using the most important metrics for a largecap conglomerate, including the debttoequity (D/E) ratio and the interest coverage ratio.

Cash Asset Ratio
The cash asset ratio is the current value of marketable securities ... 
Current Ratio
The current ratio is a liquidity ratio that measures a company's ... 
Quick Ratio
The quick ratio measures a company’s ability to meet its shortterm ... 
Liquidity Ratios
A class of financial metrics that is used to determine a company's ... 
Ratio Analysis
A ratio analysis is a quantitative analysis of information contained ... 
Liquidity
Liquidity is the degree to which an asset or security can be ...