What Is Quick Ratio?

quick ratio  Quick Ratio Formula The formula for calculating the quick ratio is equal to cash plus accounts receivable, divided by current liabilities  A quick ratio of 1 or above indicates that the company has sufficient liquid assets to satisfy its short-term obligations An extremely high

A quick ratio of 1:1 implies that a company's liquid assets are sufficient to meet its current liabilities However, a higher quick ratio is generally How is the quick ratio calculated? · Subtract the value of the company's inventory from that of its current assets This leaves you with the

Understanding the Quick Ratio Where: A quick ratio of is considered good It means that the company has enough money on hand to pay its Current ratio is calculated by dividing current liabilities with current assets It includes all the prepaid expenses, inventory, cash and cash equivalents, etc