Definition of Doomsday ratio:
Ratio used to evaluate the current liabilities and cash on hand at a business in order to determine if a company will be able to repay obligations should it go under or file bankruptcy. Companies and creditors use this information to identify cash flow issues or determine if the business has overleveraged itself. This ratio can be calculated by taking current cash on hand and dividing it by current liabilities.
Meaning of Doomsday ratio & Doomsday ratio Definition