Quick Ratio Calculator (Acid-Test Ratio)

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Direct adds up the liquid assets. Indirect starts from total current assets and strips out inventory and prepaid expenses. Both give the same quick ratio when the numbers are consistent.
Bank balances, money market funds, petty cash, and other instruments that are already cash or convert to cash within days.
Short-term investments that trade in active markets and can be sold quickly, such as Treasury bills, commercial paper, and listed stocks.
Money owed by customers that is expected to be collected in cash in the near term.
Debts and obligations due within one year (accounts payable, short-term debt, accrued expenses).
Optional rough sector median to compare against. Healthy quick ratios vary widely by industry.
Currency
Quick ratioStrong liquidity cushion
1.6

Liquid current assets per 1 unit of current liabilities.

Quick assets$80,000
Liquidity surplus or shortfall$30,000
1.6
Tight<1Adequate1-1.5Comfortable1.5+

Quick ratio of 1.6, liquid assets cover current liabilities.

  • For every 1 unit of current liabilities, the company holds about 1.6 in liquid assets it can tap without selling inventory.
  • Liquid assets exceed current liabilities by 30,000, a cushion the firm could draw on if bills came due at once.
  • A ratio of 1.0 or higher means the company can meet short-term obligations from cash, receivables, and securities alone.

Next stepCompare this ratio with the current ratio and with industry peers, since healthy levels vary by sector.

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