This Quick Ratio Calculator is used to calculate the quick ratio.
In business, the quick ratio is obtained by subtracting inventories from current assets and then dividing by current liabilities. Generally, the quick ratio should be 1:1 or higher; however, this varies widely by industry. In general, the higher the ratio, the greater the company’s liquidity (i.e. the better able to meet current obligations using liquid assets). The quick ratio is also known as the acid test ratio.
The quick ratio calculation formula is as follows:
Quick ratio = (Current assets - Current inventory) / Current liabilities