How to Use the Quick Ratio Calculator
- Fill in total cash.
- Fill in marketable securities.
- Fill in accounts receivable amount.
- Fill current liabilities amount.
- Press Calculate.
Quick Ratio Defined
A simple view of the liquidity of a company. It can be helpful to compare across multiple financial statements to reveal patterns and possible trajectories of business liquidity.
Quick Ratio Formula
Calculate the quick ratio using the following formula:
Quick ratio = current assets / current liabilities
You can find the quick assets using the following formula:
Quick assets = cash & equivalents + accounts receivable + marketable securities
Quick Ratio Example
First, find the current assets on the balance sheet.
| Current Assets | |
|---|---|
| Cash & equivalents | $20,000 |
| Accounts receivables | $200,000 |
| Marketable securities | $10,000 |
| Total current assets | $230,000 |
Next, locate your current liabilities on the balance sheet.
| Current Liabilities | |
|---|---|
| Accounts payable | $100,000 |
| Accrued expenses | $20,000 |
| Other short-term liabilities | $5,000 |
| Total current liabilities | $125,000 |
Once you have found the current assets and current liabilities on the balance sheet, you can calculate the quick ratio.
Quick ratio = current assets / current liabilities
= $230,000 / $125,000
= 1.84