Liquidity Ratios Calculator (Current, Quick, Cash)
Calculate the current ratio, quick (acid-test) ratio, and cash ratio from current assets, inventory, cash, and current liabilities. Educational. Runs in your browser.
Excluded from the quick ratio (slow to convert to cash).
Used for the cash ratio.
The three liquidity ratios get progressively stricter about what counts as available to pay short-term bills. The current ratio counts all current assets; the quick (acid-test) ratio strips out inventory, which can be slow to sell; the cash ratio counts only cash and equivalents. A ratio of 1.0 means assets at that level exactly equal current liabilities. Higher means more cushion, but very high can mean idle resources. Norms vary by industry. Educational; everything runs in your browser.
About this tool
Liquidity ratios answer a single question — can a company pay its short-term bills? — at three increasing levels of strictness. The current ratio is the broadest: total current assets divided by current liabilities. It counts everything expected to turn into cash within a year (cash, receivables, inventory, prepaids) against everything due within a year. The quick ratio, also called the acid-test ratio, is tougher: it removes inventory (and often prepaid expenses) from the numerator, because inventory can be slow or uncertain to convert to cash, especially in a downturn. The cash ratio is the strictest of all, counting only cash and cash equivalents — the test of whether a company could settle its current liabilities immediately without selling anything or collecting a single invoice. A ratio of 1.0 at any level means the assets at that tier exactly equal current liabilities; above 1.0 there is a cushion, below 1.0 there is a potential shortfall. Reading the three together is more revealing than any one alone: a healthy current ratio paired with a weak quick ratio tells you the company is leaning heavily on inventory to look solvent. As with all financial ratios, acceptable levels are industry-specific — a fast-turning retailer can safely run lower ratios than a manufacturer — so compare against direct peers and the company's own history. This is educational, not financial advice. Everything runs in your browser; nothing is uploaded.
How to use it
- Enter total current assets and total current liabilities.
- Enter inventory — it is removed for the quick ratio.
- Enter cash and equivalents — used for the cash ratio.
- Read all three ratios; compare each to 1.0 and to industry norms.
Frequently asked questions
- What is the difference between the current, quick, and cash ratios?
- All divide assets by current liabilities but count fewer assets each step: current ratio uses all current assets; quick (acid-test) ratio excludes inventory; cash ratio counts only cash and equivalents. Each is a stricter test of short-term solvency.
- How is the quick ratio calculated?
- Quick ratio = (current assets − inventory) ÷ current liabilities. Some analysts also subtract prepaid expenses. It measures the ability to cover short-term obligations without relying on selling inventory.
- What is a good liquidity ratio?
- A current ratio around 1.5–2.0 and a quick ratio near or above 1.0 are often cited as healthy, but the right level depends heavily on industry. Fast-turning retailers safely run lower than capital-intensive manufacturers.
- Why is the cash ratio so much lower than the others?
- Because it counts only cash and equivalents — not receivables or inventory. Most healthy companies run a cash ratio well below 1.0, since holding enough cash to cover all current liabilities at once would usually mean leaving money idle.
- Can a ratio be too high?
- Yes. Very high liquidity ratios can indicate cash, receivables, or inventory sitting idle instead of being invested in growth. Liquidity is about adequacy, not maximisation.
- Is anything uploaded?
- No. All calculations run entirely in your browser.