the Cash ratio is a Key figure A measure of a company's liquidity. It indicates the extent to which a company is in a position to settle its short-term debts exclusively with liquid funds. A high cash ratio indicates a solid Liquidity while a low value may indicate possible liquidity problems.
Differentiation between the calculation methods
There are two common approaches to calculating the cash ratio:
- Cash ratio (by profit)
- Significance: Measures the net cash flow from operating activities in relation to net profit.
- Cash ratio (by revenue)
- Significance: Represents the net cash flow from operating activities in relation to the net sales generated.
Use in SAP Business One
The cash ratio is a predefined key performance indicator (KPI) in SAP Business One
- Available countries: China, Germany, Great Britain, USA.
- Calculation basis: "Calculation View KPI Balance Sheet Query".
- The key figure is calculated on a daily basis in the context of the current month and provides real-time insights into the financial situation of a company
Versino Financial Suite
the Versino Financial Suite makes monitoring and analysing the cash ratio in SAP Business One much more convenient, transparent and meaningful. It offers real-time transparency, drill-down options, automated checks and flexible reports - a clear added value for liquidity management in the company.
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