The quick ratio compares readily available current assets with current liabilities.
Quick Ratio Calculator
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Quick ratio
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Table of Contents
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What is Quick Ratio?
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How to Use This Calculator
- Enter or select Cash and cash equivalent, Marketable securities, Accounts receivable, Current liabilities.
- Check the unit beside each measurement. For a percentage or rate, use the scale and time period stated in the form.
- Choose Calculate, then compare the output with the formula and example below. If you change a value or option, calculate again to update the result.
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Formula Used
Quick ratio = (cash+marketable securities+receivables)/current liabilities
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Variables Explained
| Input | What it means |
|---|---|
| Cash and cash equivalent | Use the measured or stated value for this item, with the unit or category shown beside the field. |
| Marketable securities | Use the measured or stated value for this item, with the unit or category shown beside the field. |
| Accounts receivable | Use the measured or stated value for this item, with the unit or category shown beside the field. |
| Current liabilities | Use the measured or stated value for this item, with the unit or category shown beside the field. |
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Worked Example
Quick assets of 150,000 against liabilities of 100,000 give a ratio of 1.5.
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Why Use This Calculator?
Compare the result with the underlying statement, budget or proposed transaction. It is most useful when every amount uses the same reporting period and the same accounting definition.
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Common Mistakes
- Inventory is excluded, and receivables may not turn into cash immediately.
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Frequently Asked Questions
Should I use monthly or annual figures?
Use one consistent period for every amount and rate in the relationship. If a form specifies an annual rate or a monthly amount, follow that label rather than mixing time periods.
Does the result include fees and tax?
Only the costs and taxes represented by the inputs and formula are included. A real transaction can include other charges, so compare the estimate with the underlying agreement or statement.
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Sources & References
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