Free Quick Ratio Calculator
Calculate the quick ratio (acid-test ratio) to measure liquidity without relying on inventory or prepaid expenses.
Quick Ratio
1.40
Quick Ratio vs Total Current Assets
How to Calculate the Quick Ratio
Formula
Quick Ratio = (Current Assets - Inventory - Prepaid Expenses) / Current Liabilities
Also called the acid-test ratio, this metric strips out inventory and prepaid expenses because those assets cannot be converted to cash instantly. The result tells you whether the company can cover its bills using only its most liquid assets such as cash, marketable securities, and receivables.
Example Calculation
A company has $500,000 in current assets, $120,000 in inventory, $30,000 in prepaid expenses, and $250,000 in current liabilities.
- 01Quick Assets = $500,000 - $120,000 - $30,000 = $350,000
- 02Quick Ratio = $350,000 / $250,000 = 1.40
- 03The company has $1.40 in liquid assets for each $1 of current liabilities.
Frequently Asked Questions
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