Calculate the quick ratio of your business using this calculator. Enter your total cash (and cash equivalent), marketable securities, accounts receivable, and current liabilities.

Quick Ratio Formula

The following formula is used to calculate the quick ratio of a company.

quick ratio = (C + S + AR) / CL
  • Where C is cash and cash equivalents
  • S is securities
  • AR is accounts receivable
  • CL is current liabilities

Quick Ratio Definition

Quick Ratio is a financial metric that measures a company’s ability to cover its short-term liabilities with its most liquid assets.

How to calculate quick ratio?

Here’s an example of how you can use this calculator or formula to calculate the quick ratio of a business.

  1. First, you must take the measure of all of your cash. This includes cash equivalents. Let’s say you find you currently have $10,000,000.00 in cash.
  2. Next, you need to measure your marketable securities. This will be a measure of the current value of those securities, not potential future value. Let’s say you have $5,000,000.00 in securities.
  3. Next, you must take account of all of your current account’s receivable, or pending invoices. Let’s say you have $2,000,000.00.
  4. Finally, you need to calculate your total liabilities. This includes all outstanding loans, payments, etc. Let’s assume you have $10,000,000.00 in liabilities.
  5. Plug all of these into the calculator and you get a quick ratio of 1.7. Anything above 1 is considered a great quick ratio. That means no matter what, you can pay off your debts.

FAQ

What is a quick ratio?

A quick ratio is a measure of how well a business is set up to pay off its liabilities.

quick ratio calculator
quick ratio formula

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