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.
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
First, find the current assets on the balance sheet.
Next, locate your current liabilities on the balance sheet.
Once you have found the current assets and current liabilities on the balance sheet, you can calculate the quick ratio.
= $230,000 / $125,000