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Quick Ratio Calculator (Acid Test Ratio)

Calculator

Quick Ratio (Standard)

Quick Ratio (Alternate)

What is the Quick Ratio (aka Acid Test Ratio)?

The Quick Ratio (also known as the Acid Test Ratio) is a measure of how well a company can meet a short-term financial obligation.

A high quick ratio means that a company can easily pay a short-term financial obligation. A low quick ratio means they might not be able to pay it.

Formula

Quick Ratio (Standard) = (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities

Quick Ratio (Alternate) = (Current Assets – Inventory) / Current Liabilities

Example

Standard – A company has cash of $3,000, marketable securities of $4,000, accounts receivable of $3,000, and current liabilities of $5,000.

Quick Ratio (Standard) = ($3,000 + $4,000 + $3,000) / $5,000 = $10,000 / $5,000 = 2.00

Alternate – A company has current assets of $10,000, inventory of $4,500, and current liabilities of $5,000.

Quick Ratio (Alternate) = ($10,000 – $4,500) / $5,000 = $5,500 / $5000 = 1.10

Sources and more resources