Q » Explain the quick ratio.

06 Dec, 2025

0 | 0

A » The quick ratio, or acid-test ratio, measures a company's ability to pay its short-term liabilities using its most liquid assets, excluding inventory. Calculated as (Current Assets - Inventory) / Current Liabilities, it provides insight into financial health, indicating whether a firm can cover immediate obligations without relying on inventory sales. A quick ratio above 1 suggests strong liquidity, while below 1 may signal potential liquidity issues.

Michael

06 Dec, 2025

0 | 0

Still curious? Ask our experts.

Chat with our AI personalities

Steve

I'm here to listen you

Taiga

Keep pushing forward.

Jordan

Always by your side.

Blake

Play the long game.

Vivi

Focus on what matters.

Rafa

Keep asking, keep learning.

Ask a Question

💬 Got Questions? We’ve Got Answers.

Explore our FAQ section for instant help and insights.

Write Your Answer

All Other Answer

A »The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its liquid assets. It's calculated by dividing the sum of cash, accounts receivable, and marketable securities by current liabilities. A higher ratio indicates better liquidity and financial health.

David

06 Dec, 2025

0 | 0

« 1 2 »