Quick Ratio (Acid Test)
(Current assets − Inventory) / Current liabilities. Stricter than current ratio.
Result
Quick ratio
1.150
Healthy
- Current assets$400
- Inventory excluded$150
- Prepaid excluded$20
- Quick assets$230
- Current liabilities$200
- Quick ratio1.1500
- TierHealthy
Step-by-step
- Quick assets = current assets − inventory − prepaid = 400 − 150 − 20 = $230.
- Quick ratio = 230 / 200 = 1.150.
How to use this calculator
- From balance sheet: subtract inventory + prepaid from current assets.
- Divide by current liabilities.
About this calculator
Quick ratio (acid test): more conservative liquidity measure than current ratio. Excludes inventory (slow to convert to cash, may need discount) and prepaid expenses (no cash value). Quick > 1 = can pay current obligations from liquid assets alone. Retail and manufacturing typically run 0.5-1.0 (lots of inventory); tech and services run 1.5-3.0 (cash-rich).
Frequently asked
Inventory takes time to sell and may require discounting. Cash, AR, and short-term investments are "quick" to convert.
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