liquidity ratio

noun [C]

Definition

› ACCOUNTING the value of a company's cash and assets that can be easily changed into cash in relation to the amount of debt it has to pay back, usually over the next 12 months: The company is perilously close to being in breach of its liquidity ratio.

› BANKING the amount of cash that a bank should have available as a percentage of the total amount of money that customers of the bank have paid into it: The banks' statutory liquidity ratio was cut by one percentage point to 24% of their deposits. → See also cash ratio

(Definition of liquidity ratio noun from the Cambridge Business English Dictionary © Cambridge University Press)