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Quick Ratio Calculator

Compute the Quick Ratio = (Cash & Cash Equivalents + Marketable Securities + Accounts Receivable) ÷ Current Liabilities.

Quick Ratio

The Quick Ratio, also known as the Acid-Test Ratio, is a key financial metric used to evaluate a company’s short-term liquidity position. It measures a firm’s ability to cover its current liabilities using only its most liquid assets—those that can be quickly converted into cash. Unlike the current ratio, the quick ratio excludes inventory, as inventory might take longer to liquidate and may not be reliable in times of financial stress.

A higher quick ratio indicates that a company is well-positioned to pay off its short-term obligations without relying on the sale of inventory, while a lower ratio may signal liquidity issues.

Formula for Quick Ratio

The formula for the quick ratio is:

Quick Ratio = (Cash & Cash Equivalents + Marketable Securities + Accounts Receivable) ÷ Current Liabilities

This ratio provides a realistic measure of financial health by considering only the most liquid assets.

Examples of Quick Ratio Calculations

Let’s go through some practical examples to understand the quick ratio better:

Example 1

Cash & Cash Equivalents: $25,000

Marketable Securities: $5,000

Accounts Receivable: $10,000

Current Liabilities: $20,000

Quick Ratio = (25,000 + 5,000 + 10,000) ÷ 20,000 = 2.0

✅ Interpretation: The company has $2 in liquid assets for every $1 of liability, indicating strong liquidity.

Example 2

Cash & Cash Equivalents: $8,000

Marketable Securities: $2,000

Accounts Receivable: $5,000

Current Liabilities: $12,000

Quick Ratio = (8,000 + 2,000 + 5,000) ÷ 12,000 = 1.25

✅ Interpretation: The company can meet its short-term liabilities with a reasonable safety margin.

Example 3

Cash & Cash Equivalents: $3,000

Marketable Securities: $500

Accounts Receivable: $1,500

Current Liabilities: $7,000

Quick Ratio = (3,000 + 500 + 1,500) ÷ 7,000 = 0.714

✅ Interpretation: The company has only 71 cents in liquid assets for every $1 of liability, which may raise concerns about short-term financial stability.

These examples demonstrate how the quick ratio varies depending on the composition of liquid assets and liabilities.

Features of Our Quick Ratio Calculator

✅ Instant calculations with accurate results
✅ User-friendly interface suitable for students, analysts, and professionals
✅ Works across devices – desktop, mobile, and tablets
✅ Completely free with no sign-ups or subscriptions required
✅ Dual utility – useful for both academic and practical financial analysis
✅ Ideal for comparing liquidity positions across multiple companies

Who Should Use This Calculator?

Business Owners & Entrepreneurs – To check if their business can handle short-term debts.
Financial Analysts – For quick assessment of a company’s liquidity health.
Investors & Creditors – To evaluate if a business is financially sound before investing or lending.
Students & Teachers – For accounting, finance, and MBA coursework.
Risk Managers – To assess financial risk in credit evaluations.

Why Use an Online Quick Ratio Calculator?

While manual calculation of the quick ratio is possible, it can be time-consuming and error-prone, especially when comparing multiple companies. An online calculator provides:

⚡ Instant results in seconds
🎯 Accurate ratios without manual mistakes
📊 Clear outputs for easy interpretation
🛠️ Convenience for professionals and students alike

Practical Applications of Quick Ratio

Credit Analysis – Banks and lenders use the quick ratio to evaluate loan applications.
Investment Decisions – Investors check liquidity ratios before buying stocks or bonds.
Business Planning – Entrepreneurs use it to gauge short-term financial resilience.
Financial Health Checks – Regular monitoring of liquidity ensures businesses avoid cash flow crises.
Education & Training – Helps students and researchers understand real-world financial ratios.

✅ The Quick Ratio Calculator is a must-have tool for anyone working with financial statements, business analysis, or investment decisions. Whether you are a student, analyst, entrepreneur, or investor, this calculator gives you fast, accurate, and reliable results to assess short-term liquidity effectively.

👉 Try the Quick Ratio Calculator on Hive Calculator today and make smarter financial decisions with ease and confidence.