Read the variables and convention
Use the specified cash, short-term security and net current receivable convention.
| Symbol or input | Meaning |
|---|---|
| C | Cash and cash equivalents |
| S | Short-term marketable securities |
| R | Net current receivables |
| CL | Positive current liabilities |
Check a stated example
Cash 200, securities zero, receivables 400 and liabilities 500 give 1.2×.
Keep the amount units, reporting date or period and the numerator definition beside the calculation. A matching label makes the result reproducible.
Interpret the result within its scope
Inventory and prepaids are excluded here; sources with another convention need reconciliation before comparison.
For a comparison, inspect the relevant notes and accounting conventions as well as the calculated number. A change in the inputs and a change in the definition answer different analytical questions.