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Jun 19, 2024 · Quick ratio measures a company's ability to pay its short-term obligations with its most liquid assets. Learn how to calculate it, what it indicates, and its advantages and disadvantages.
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.
Jun 8, 2022 · Quick ratio measures the ability of a company to meet its short-term financial obligations with quick assets. It is useful for analyzing creditworthiness and liquidity, but it has some limitations and advantages.
The quick ratio is a metric which measures a firm’s ability to pay its current debts without selling additional inventory or raising additional capital. 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.
May 16, 2024 · Learn what the Quick Ratio is, how to calculate it, and why it matters for investors and businesses. The Quick Ratio measures a company's ability to pay off its short-term debts without selling inventory.
May 21, 2024 · The acid-test ratio, or quick ratio, measures a company's ability to pay its short-term liabilities with its most liquid assets. It excludes inventory and other assets that are difficult to convert to cash quickly. Learn how to calculate and interpret the acid-test ratio with an example.
Quick ratio. In finance, the quick ratio, also known as the acid-test ratio, is a liquidity ratio that measures the ability of a company to use near-cash assets (or 'quick' assets) to extinguish or retire current liabilities immediately. It is the ratio between quick assets and current liabilities. A normal liquid ratio is considered to be 1:1.
