Quick ratio calculator
A stricter test than the current ratio: can the company pay its short-term obligations without selling inventory?
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How to use it
- Enter cash and equivalents, marketable securities, accounts receivable and current liabilities.
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
Quick ratio = (cash + marketable securities + accounts receivable) ÷ current liabilities.
Example
Inputs: Cash and equivalents = 50,000, Marketable securities = 20,000, Accounts receivable = 30,000, Current liabilities = 80,000. Result: Quick ratio: 1.25 times; Quick assets: 100,000.00; Cash ratio (cash and securities only): 0.88 times.
Limits and caveats
- Some analysts compute it as current assets minus inventory and prepaid expenses, which can give a slightly different figure.
- Assumes receivables will actually be collected on time.
Questions about this tool
Why is inventory left out?
Selling inventory can take time or need discounts, so it is not a quick source of cash.
What does a ratio below 1 mean?
Quick assets alone cannot pay current liabilities, so the company may need to sell stock or borrow.
How is it different from the cash ratio?
The cash ratio also leaves out receivables, making it even stricter; the calculator shows both.