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

Similar to the current ratio, the quick ratio is a measure of the liquidity of a business. It’s other name goes by the acid-test ratio, which as the name suggests, is a measure of how “acidic” or how much risk a business currently contains.

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

Each of these variables goes by there name instead of a letter to make sure it’s understood which values go where. Unlike the current ratio, this separates the assets from one another. The liabilities include all outstanding payments, loans, ect.

## 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.

First, you must take measure of all of your cash. This includes cash equivalents. Lets say you find you currently have $10,000,000.00 in cash.

Next, you need to measure your marketable securities. This will be a measure of the current value of those securities, not potential future value. Lets say you have $5,000,000.00 in securities.

Next, you must take account of all of your current account’s receivable, or pending invoices. Lets say you have $2,000,000.00.

Finally, you need to calculate your total liabilities. This includes all outstanding loans, payments ect. Lets assume you have $10,000,000.00 in liabilities.

Plug all of these into the calculate 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.

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