What is a Quick Ratio? Guide with Examples

quick ratio  The quick ratio is a formula and financial metric determining how well a company can pay off its current debts  Many analysts consider a quick ratio between 5 to be good A ratio under may indicate potential liquidity issues, while a ratio over

The quick ratio, sometimes knows as the quick assets ratio or the acid test, is a way to identify and indicate a company's short-term liquidity A higher quick ratio means a higher liquidity and a lower risk of insolvency A general rule of thumb is that a quick ratio of 1 or more is considered good, as

Understanding the Quick Ratio · The quick ratio evaluates a company's ability to pay its current obligations using liquid assets · The higher Due to its stricter guidelines, the quick ratio is more conservative It excludes inventory from the equation The other major difference between the two is