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Quick ratio

Discuss Quick ratio within the Financial Management ( FM ) forums, part of the Resolve Your Query - Get Help and discuss Projects category; Acid Test or Quick Ratio A measurement of the liquidity position of the business. The quick ratio compares the cash ...

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Quick ratio
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Sunanda K. Chavan
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Quick ratio - September 13th, 2010

Acid Test or Quick Ratio

A measurement of the liquidity position of the business. The quick ratio compares the cash plus cash equivalents and accounts receivable to the current liabilities.

The primary difference between the current ratio and the quick ratio is the quick ratio does not include inventory and prepaid expenses in the calculation. Consequently, a business's quick ratio will be lower than its current ratio. It is a stringent test of liquidity.

• Formula

Cash + Marketable Securities + Accounts Receivable
Current Liabilities
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Rose Marry
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Re: Quick ratio - April 14th, 2016

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Originally Posted by sunandaC View Post
Acid Test or Quick Ratio

A measurement of the liquidity position of the business. The quick ratio compares the cash plus cash equivalents and accounts receivable to the current liabilities.

The primary difference between the current ratio and the quick ratio is the quick ratio does not include inventory and prepaid expenses in the calculation. Consequently, a business's quick ratio will be lower than its current ratio. It is a stringent test of liquidity.

Formula

Cash + Marketable Securities + Accounts Receivable
Current Liabilities
Hey there,

Here I am uploading Notes on Current Ratio and Quick Ratio, so please download and check it.
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File Type: pdf Notes on Current Ratio and Quick Ratio.pdf (324.3 KB, 0 views)
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