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Jun 19, 2024 · The quick ratio is an indicator of a company’s short-term liquidity position and measures a company’s ability to meet its short-term obligations with its most liquid assets.
The Quick Ratio, also known as the Acid-test or Liquidity ratio, measures the ability of a business to pay its short-term liabilities by having assets that are readily convertible into cash. These assets are, namely, cash, marketable securities, and accounts receivable.
What is Quick Ratio? The quick ratio, also known as acid-test ratio, is a financial ratio that measures liquidity using the more liquid types of current assets. Its computation is similar to that of the current ratio, only that inventories and prepayments are excluded. Quick Ratio Formula
Aug 21, 2024 · The quick ratio solves the problem by not considering inventory. Quick Ratio Explained. Quick Ratio helps stakeholders measure an entity’s capacity to pay off its short term obligations by using its liquid assets like cash, accounts receivable and marketable securities.
Aug 21, 2024 · The quick Ratio Formula is one of the most important Liquidity Ratios for determining the company’s ability to pay off its current liabilities in the short term and is calculated as the ratio of cash and cash equivalents, marketable securities, and accounts receivables to Current Liabilities.
May 16, 2024 · The Quick Ratio, also known as the Acid-Test Ratio, is a financial metric used to assess a company’s short-term liquidity and its ability to cover its immediate financial obligations...
Jul 26, 2024 · The quick ratio (acid-test ratio) is a simple indicator used to measure the ability of a company to meet its short-term obligations with its most liquid assets. In other words, the quick ratio allows you to determine whether or not a company has enough resources to fulfill its obligations that are due within a year.
