Calculate the quick ratio (acid-test ratio) to assess a company's ability to pay short-term obligations with its most liquid assets.

Quick Ratio: 1.50
Interpretation: ✅ Good — Company can cover short-term obligations without selling inventory.

Formula: Quick Ratio = (Cash + Securities + Receivables) ÷ Current Liabilities. A ratio above 1.0 is generally considered healthy.

What is the Quick Ratio?

The Quick Ratio, also known as the Acid-Test Ratio, is a liquidity metric that measures a company's ability to pay its short-term obligations using only its most liquid assets — cash, marketable securities, and accounts receivable .

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

Unlike the current ratio, the quick ratio excludes inventory and prepaid expenses from the calculation. This makes it a more conservative and stringent measure of liquidity, as it assumes that a company may not be able to quickly sell its inventory at full value in an emergency .

Key interpretation:

• > 1.0 — company has enough liquid assets to cover short-term debts without selling inventory [citation:1][citation:4]
• = 1.0 — liquid assets exactly match current liabilities
• < 1.0 — potential liquidity concerns; may need to sell inventory or seek financing

A quick ratio of 1.0 or higher is generally considered healthy, but the ideal range varies by industry. Some businesses with fast inventory turnover may operate comfortably with a ratio below 1.0 .

How to Use This Calculator

1. Enter Cash & Cash Equivalents: Include cash on hand, bank balances, and short-term investments.
2. Enter Marketable Securities: Include stocks, bonds, and treasury bills that can be quickly sold.
3. Enter Accounts Receivable: Money owed to the company by customers.
4. Enter Current Liabilities: All obligations due within one year (accounts payable, short-term debt, etc.).
5. Calculate: Click “Calculate Quick Ratio” or press Enter.
6. Interpretation: The result shows the ratio and a guide to understanding it. A ratio above 1.0 indicates good liquidity .