Quick Ratio Calculator
Calculate your company's quick ratio to understand its short-term liquidity using cash, marketable securities, accounts receivable, and current liabilities.
Calculate Quick Ratio
Enter the company's liquid assets and current liabilities below.
What Is a Quick Ratio Calculator?
A Quick Ratio Calculator helps estimate a company's ability to pay its short-term financial obligations using assets that can normally be converted into cash relatively quickly.
The quick ratio is also commonly called the acid-test ratio. Unlike the current ratio, it generally excludes inventory and prepaid expenses because those assets may not be immediately available for settling current liabilities.
How to Use the Quick Ratio Calculator
Enter Liquid Assets
Add cash, cash equivalents, marketable securities, and accounts receivable.
Enter Liabilities
Enter the company's total current liabilities for the same financial reporting period.
Calculate the Ratio
Click the calculate button to see the quick ratio and an easy-to-understand liquidity indication.
How the Quick Ratio Calculation Works
The calculator first adds the company's most liquid current assets. That total is then divided by current liabilities.
Example
Suppose a company has:
| Financial Item | Amount |
|---|---|
| Cash & Cash Equivalents | $50,000 |
| Marketable Securities | $15,000 |
| Accounts Receivable | $35,000 |
| Current Liabilities | $80,000 |
Total quick assets are $100,000. Dividing $100,000 by $80,000 produces a quick ratio of 1.25.
What Does Your Quick Ratio Mean?
The quick ratio can provide a useful snapshot of short-term liquidity, but it should be considered together with cash flow, payment cycles, industry conditions, and other financial information.
| Quick Ratio | General Interpretation |
|---|---|
| Below 1.00 | Liquid assets are lower than current liabilities. The company may rely on inventory sales, financing, or future cash inflows. |
| 1.00 | Liquid assets approximately equal current liabilities. |
| Above 1.00 | Liquid assets exceed current liabilities based on the values entered. |
| Above 2.00 | The company has substantially more quick assets than current liabilities, although an unusually high ratio may also indicate unused liquid resources. |
There is no single ideal quick ratio for every company. Appropriate levels can differ significantly by industry, operating model, collection periods, and access to financing.
Quick Ratio vs. Current Ratio
Both ratios evaluate short-term liquidity, but they use different definitions of available assets.
The current ratio normally includes all current assets, including inventory. The quick ratio focuses on assets that are expected to be more readily available for paying short-term liabilities.