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Jun 19, 2024 · Learn how to calculate the quick ratio, a measure of a company's short-term liquidity, using different methods and components. See the advantages and disadvantages of the quick ratio and how it differs from the current ratio.
The Quick Ratio Formula. Quick Ratio = [Cash & equivalents + marketable securities + accounts receivable] / Current liabilities. Or, alternatively, Quick Ratio = [Current Assets – Inventory – Prepaid expenses] / Current Liabilities. Example. For example, let’s assume a company has: Cash: $10 Million. Marketable Securities: $20 Million.
Learn how to calculate the quick ratio, a measure of liquidity that excludes inventories and prepayments, using the balance sheet of GHI Company. See the formula, the example, and the interpretation of the quick ratio.
Learn how to calculate the quick ratio or acid test ratio, a liquidity measure that shows the ability to pay current liabilities with quick assets. See the formula, examples and how to interpret the ratio for different situations.
Jun 8, 2022 · Learn what quick ratio is, how to calculate it, and why it is important for analyzing a company's liquidity position. Find out the advantages, limitations, and examples of quick ratio, and compare it with other accounting ratios.
May 16, 2024 · Learn how to calculate the Quick Ratio, a financial metric that measures a company's ability to meet its short-term obligations without selling inventory. Find out why the Quick Ratio matters for investors, creditors, and businesses, and how it differs from the Current Ratio.
It is calculated as the dollar value of a firm’s “quick” assets (cash equivalents, securities, and receivables), divided by the firm’s current debt. The quick ratio is often compared to the cash ratio and the current ratio, which include different assets and liabilities.
