Cash Flow Liquidity Ratio Calculator

Calculate Cash Flow Liquidity Ratio









Formula

The formula to calculate the Cash Flow Liquidity Ratio (CFLR) is:

\[ CFLR = \frac{C + CE + MS + CFO}{CL} \]

Where:

Cash Flow Liquidity Ratio Definition

The cash flow liquidity ratio is a financial metric that measures a company’s ability to cover its short-term liabilities with its cash flow from operations, cash, cash equivalents, and marketable securities. This ratio is an important indicator of a company’s short-term financial health and its ability to meet its obligations without needing to secure additional financing. A higher cash flow liquidity ratio indicates a stronger liquidity position, suggesting that the company is well-positioned to handle its short-term liabilities.

Example Calculation

Let's assume the following values:

Using the formula to calculate the Cash Flow Liquidity Ratio (CFLR):

\[ CFLR = \frac{5000 + 2000 + 3000 + 10000}{15000} = 1.4667 \]

The Cash Flow Liquidity Ratio (CFLR) is approximately 1.4667.