Quick Ratio Calculator


How do you calculate the quick ratio?

A quick ratio calculator can quickly determine a company’s quick ratio. Enter the company’s liquid assets and current liabilities in the calculator, which will generate the quick ratio. A quick ratio calculator helps evaluate a company’s financial health. By quickly and accurately estimating the company’s liquidity, investors can make more informed decisions about whether to invest in the company. Additionally, creditors can use the calculator to determine the risk associated with lending to the company.


Why use the Quick Ratio calculator?

The quick ratio is a significant financial ratio that measures a company’s ability to pay its short-term liabilities with its most liquid assets. It is a more conservative measure than the current ratio because it excludes inventory and other current assets that may not be easily converted to cash. The quick ratio is calculated by dividing a company’s liquid assets, such as cash, cash equivalents, and marketable securities, by its current liabilities. The higher the ratio, the better the company’s financial health.

Quick Ratio Calculator Formula:

(Current Assets - Inventory) / Current Liabilities = Quick Ratio.

Where: 

Total Assets - Intangible Assets = Current Assets

Total Liabilities - Long-Term Liabilities = Current Liabilities

Inventory is the value of a business's inventory at a given time.

The quick ratio is essential to a company's liquidity and short-term financial health. It is calculated by dividing the company's current assets (minus inventory) by its current liabilities. A quick ratio greater than 1.0 indicates that the company has sufficient liquidity to cover its current liabilities. A ratio lower than 1.0 indicates that the company may be unable to cover its current liabilities and may be in financial trouble.


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