The quick ratio (acid test) is stricter than the current ratio because inventory and prepaid expenses can be hard to turn into cash quickly. A ratio of 1 or more is generally considered healthy.
How to use the Quick Ratio Calculator
- Cash and cash equivalents
- Marketable securities
- Accounts receivable
- Current liabilities
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter cash, marketable securities, accounts receivable and current liabilities.
Tips
- Check whether rates are quoted annually, semi-annually or per period.
- Bond prices and yields move in opposite directions – a higher yield means a lower price.
- Use the bond’s clean price (without accrued interest) for yield calculations.
- Credit ratios are most useful when tracked over several years.
Common mistakes to avoid
- Confusing the coupon rate with the yield.
- Using the face value instead of the market price.
- Forgetting that callable bonds may be redeemed before maturity.
Inputs explained
| Field | What to enter |
|---|---|
| Cash and cash equivalents | Amount in your currency |
| Marketable securities | Amount in your currency |
| Accounts receivable | Amount in your currency |
| Current liabilities | Amount in your currency |
What each result means
- Quick ratio = ([Cash and cash equivalents] + [Marketable securities] + [Accounts receivable])÷[Current liabilities]
- Quick assets = [Cash and cash equivalents] + [Marketable securities] + [Accounts receivable]
Example values
How the main result changes when Cash and cash equivalents changes and everything else stays at the example values above:
| Cash and cash equivalents | Quick ratio |
|---|---|
| 75,000 | 1.02 |
| 112,500 | 1.13 |
| 150,000 | 1.25 |
| 187,500 | 1.37 |
| 225,000 | 1.48 |
| 300,000 | 1.72 |
Formula
Quick ratio = (cash + marketable securities + accounts receivable) ÷ current liabilitiesWorked example
Inputs — Cash and cash equivalents: $150,000; Marketable securities: $50,000; Accounts receivable: $200,000; Current liabilities: $320,000.
Results — Quick ratio = 1.25; Quick assets = $400,000.00; Liquidity = Healthy.
Frequently asked questions
What is a good quick ratio?
1.0 or higher.
Why exclude inventory?
It may take time or discounts to sell.
How is it different from the current ratio?
The current ratio includes inventory and other current assets.
What formula does the Quick Ratio Calculator use?
Quick ratio = (cash + marketable securities + accounts receivable) ÷ current liabilities.