Liquidity Ratios

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What it means

A family of ratios (operating cash flow, working capital to sales, defensive interval) that measure short-term survivability.

Why it matters

Multiple angles on 'can we pay the bills?' — a single ratio can mislead.

How to calculate — with Cawan's Shoes

OCF Ratio = OCF / Current Liabilities. WC/Sales = (CA−CL)/Revenue. Defensive Interval = (Cash+Receivables+Marketable Securities) / Daily Opex. Cawan's Shoes: OCF $90M / CL $120M = 0.75.

What's at stake if you ignore this

Miss these and payroll/supplier bills stop clearing.