Understanding the Current Ratio and Quick Ratio: A Guide -

quick ratio  Learning Outcomes The Quick Ratio, sometimes called the Acid Test Ratio, measures the firm's ability to pay its current liabilities with its cash and other As quick ratio uses the company's quick assets to pay off the liabilities it is also called as acid ratio The other name for this ratio is

How is the quick ratio calculated? · Subtract the value of the company's inventory from that of its current assets This leaves you with the Listed for the past two fiscal years, the quick ratio measures a company's balance-sheet liquidity The calculation is current assets minus inventory, divided

Considered the more conservative ratio, the quick ratio only considers assets that can be quickly converted to cash, whereas the current ratio Discover the essence of quick ratios: what they are, how to calculate them, why inventory is excluded, and strategies for improvement