Financial Statements
Quick Ratio
A stricter liquidity ratio that excludes some less liquid current assets like inventory.
Also called: acid-test ratio, acid test ratio
What it means
The quick ratio usually compares cash, marketable securities, and receivables against current liabilities. It is often seen as more conservative than the current ratio because it does not rely as heavily on inventory being sold quickly.
Why it matters
It helps users judge whether a company may be able to meet short-term obligations without depending on inventory sales.