What Is the Quick (Acid Test) Ratio? The quick ratio is a metric that offers investors and analysts a simple look at how liquid a company is in the short term by comparing the value of its most ...

Investors evaluate a company's ability to satisfy short-term debts with liquid assets using the quick ratio. Find out how to calculate it, interpret it, and more.

A higher quick ratio indicates more short-term liquidity and good financial health. Both of the formulas below provide the same result.

Quick Ratio Formula The quick ratio formula includes cash and equivalents, marketable securities, and accounts receivable and compares those figures to a company's current liabilities.

Quick Ratio Basics The quick ratio formula is similar to the current ratio except that you take out your inventory in the calculation.