Formula
to calculate quick ratio:
Quick ratio
= (cash + marketable securities + accounts receivable) /
current liabilities.
Quick
ratio definition and explanation:
The quick
ratio is used to evaluate liquidity.
Higher quick
ratios are needed when a company has difficulty
borrowing on short term notice
A quick ratio
of over 1:1 indicates that if the sales revenue
disappeared, the business could meet its current
obligations with the readily available "quick"
funds on hand.
A quick ratio
of 1:1 is considered satisfactory unless the majority of
"quick assets" are in accounts receivable and
the company has a pattern of collecting accounts
receivable slower than paying accounts payable.
The quick ratio is included in all our ratio
calculating programs, which provide formula, definition
and calculation of each ratio.
The quick ratio is listed in our liquidity
ratios.
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In addition to the financial
statement ratio analysis spreadsheets listed in the top
left chart, the quick ratio is also
included in out
CLA-15 Commercial Loan Officer spreadsheet which
provides the ratios, formulas and explanations for the
14 ratios used by Dunn and Bradstreet and the Altman
z-score bankruptcy predictor.
Spreadsheets to
calculate ratios (includes formulas, definitions,
explanations and charts):
See list
of ratios our spreadsheets calculate, define and
explain.
Click here
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calculator spreadsheet. Current ratio, quick
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