Cash Ratio Explained: The Strictest Liquidity Test Your Balance Sheet Can Pass
Cash ratio equals cash and equivalents divided by current liabilities; 0.5-1.0 is the healthy zone for most small businesses.
#financial-health
Financial Health
Assess and improve your business financial health and stability
The Piotroski F-Score, Explained: Nine Binary Tests That Separate Strong Value Stocks From Value Traps
The Piotroski F-Score grades cheap stocks on nine yes-or-no tests of profitability, leverage, and efficiency: 8 or 9 signals strength, 0-2 signals a trap.
Business Credit Scores Explained: D&B Paydex vs. Experian vs. FICO SBSS and How to Build From Zero
D&B Paydex grades payment speed 1–100, Experian forecasts delinquency risk, and FICO SBSS gates SBA loans at 155 — build all three from zero.
How to Read Your Balance Sheet Without an Accounting Degree: Assets, Liabilities, Equity, and the 5-Minute Solvency Check
Assets minus liabilities equals equity — and three ratios (current, quick, debt-to-equity) tell you in five minutes whether your business is solvent.
Cash Flow Coverage Ratio Explained: Can Your Business Actually Afford Its Debt?
Divide operating cash flow by annual debt payments: above 1.2 your business comfortably carries its debt, below 1.0 operations alone cannot cover it.
The Cash Flow Adequacy Ratio: Can Your Operating Cash Cover Debt, Capex, and Owner Draws?
Divide operating cash flow by debt principal, capex, and owner draws: above 1.0 the business funds itself, below it the gap comes from borrowing or reserves.
Cash Flow Overtook Inflation as Small Business Owners' Top Worry in Q1 2026: What It Means for Your Runway
In Q1 2026, 31% of small business owners named cash flow their top worry, passing inflation. With a 27-day median buffer, track runway in days.
The Defensive Interval Ratio: How Many Days Could Your Business Survive With Zero Revenue?
The defensive interval ratio divides cash, marketable securities and net receivables by daily cash operating expenses to state your runway in days. Half of small businesses hold under 15 buffer days — here is how to compute and lengthen yours.
77% Say It's Worth It, But 27% Burn Out: What Bluevine's 2026 Small Business Report Shows
Bluevine's 2026 BOSS Report: 77% say ownership met or exceeded expectations but 27% report higher-than-expected burnout and 77% made sacrifices — cash-flow lessons.
The Quick Ratio (Acid-Test Ratio): The Liquidity Number Lenders Trust More Than Your Current Ratio
The quick ratio (acid-test ratio) measures whether a business can cover current liabilities using only cash, marketable securities, and receivables — deliberately excluding inventory and prepaid expenses. Covers the formula with a worked example, why loan covenants often set a quick-ratio minimum instead of a current-ratio one, why 1.0 is the textbook benchmark but fast-turn retailers healthily run 0.3–0.4, and the mistakes that make the ratio misleading.
Operating Margin, Explained: Formula, Industry Benchmarks, and How to Improve It
Operating margin — operating income divided by revenue — shows whether a business's core operation makes money before interest and taxes. Here's the formula with a worked example, 2026 benchmarks by industry (SaaS 15–35%, services 15–25%, manufacturing 8–15%, retail under 5%), how it differs from gross and net margin, and the bookkeeping errors that distort it.
The Quick Ratio (Acid-Test Ratio): The One Number That Catches a Cash Crunch Before It Happens
The quick ratio (acid-test ratio) strips inventory and prepaid expenses from current assets to test whether cash, receivables, and marketable securities alone can cover current liabilities. Includes the formula, a worked example where a 2.5 current ratio hides a 1.0 quick ratio, industry benchmarks, and the aged-receivables blind spot.