Result
Quick ratio
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Quick assets = current assets − inventory. Quick ratio = quick assets ÷ current liabilities — the same idea as the current ratio, just stricter: inventory doesn't count, since it can't always be sold quickly at full value, especially in a downturn.
The name "acid-test" comes from mining: prospectors used acid to quickly check whether metal was genuine. This ratio checks solvency just as harshly — no cushion from inventory, only cash, receivables and other assets that convert to cash fast.
The gap between the current and quick ratio is largest for inventory-heavy businesses — retail, manufacturing. For service businesses with no stock, the two ratios are usually close. A value around 1 or higher is generally seen as comfortable, but as with the current ratio, what's normal varies a lot by industry.