Quick Ratio Calculator evaluate a firm’s ability to cover its short-term debt with assets that can readily be transferred into cash, or quick assets

- Quick Ratio:
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- What does Quick Ratio mean?
- The quick ratio is also known as the acid-test ratio and is an indicator of a firm’s short-term liquidity, and measures the ability to meet its short-term obligations with its most liquid assets.

- Formula
- Quick Ratio = (Current Assets – Inventories) / Current Liabilities
- OR
- Quick Ratio = (Cash and Equivalents + Marketable Securities + Accounts Receivable) / Current Liabilities

- Example
Let’s assume Carl’s Clothing Store is applying for a loan and his balance sheet displays the following:-

**Cash**: $10,000**Accounts Receivable**: $5,000**Inventory**: $5,000**Stock Investments**: $1,000**Prepaid taxes**: $500**Current Liabilities**: $15,000**Current Liabilities**: $15,000

According to the formula:-

- Carl's quick ratio is
**1.07**