Quick Ratio Calculator

Calculate Quick Ratio







Formula

The formula to calculate the Quick Ratio is:

\[ \text{Quick Ratio} = \frac{\text{C} + \text{S} + \text{AR}}{\text{CL}} \]

Where:

What is Quick Ratio?

The Quick Ratio is a financial metric that measures a company’s ability to cover its short-term liabilities with its most liquid assets. It is a more stringent measure than the current ratio because it excludes inventory from current assets. A higher quick ratio indicates better liquidity and financial health.

Example Calculation 1

Let's assume the following values:

Using the formula:

\[ \text{Quick Ratio} = \frac{50,000 + 30,000 + 20,000}{40,000} = 2.50 \]

The Quick Ratio is 2.50.

Example Calculation 2

Let's assume the following values:

Using the formula:

\[ \text{Quick Ratio} = \frac{40,000 + 20,000 + 10,000}{50,000} = 1.40 \]

The Quick Ratio is 1.40.