Quick ratio calculator
- Formula
- (Cash and equivalents + Short-term investments + Accounts receivable) ÷ Current liabilities
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Current liabilitiesTreasury bills, money-market funds.
Quick ratio
1.35×
How it’s worked out
- 1Quick assets$900,000 + $250,000 + $600,000$1,750,000
- 2Quick assets ÷ current liabilities$1,750,000 ÷ $1,300,0001.35×
Runs in your browser; nothing you type is sent anywhere. Amounts in US dollars.
Worked on a real month of books
Northwind Traders, Inc., September 2026 (accrual basis, USD), the month the free course is taught on. Northwind holds no short-term investments; its inventory and prepaid insurance are left out. Every figure is read off the course's posted ledger, not typed.
- 1Cash + receivables$32,900 + $8,000$40,900
- 2Quick ratio$40,900 ÷ $9,4504.33×
See the statements these come from in the course.
How to read it
The quick ratio counts only assets that are cash or will be within weeks — cash, short-term investments and receivables — against current liabilities.
A ratio above 1.0 means the company could settle every current liability without selling a single unit of inventory.
Common mistakes
- Including inventory, which turns the quick ratio back into the current ratio.
- Counting receivables that are long overdue at face value; net them of the allowance.
Questions
- Is the quick ratio the acid-test ratio?
- Yes. The quick ratio and the acid-test ratio are the same measure.
- Why are inventory and prepaids excluded?
- Inventory has to be sold before it is cash, and prepaids will never be cash at all — they are services already paid for.
Read it with
The metrics read alongside this one, and the terms it is confused with.
- Current ratio vs quick ratioThe current ratio divides all current assets by current liabilities; the quick ratio counts only cash, short-term investments and receivables, leaving out inventory and prepaids that cannot pay a bill this month.Compare
- Current ratio calculatorCurrent ratio is a liquidity and working-capital metric, calculated as Current assets ÷ Current liabilities.Calculator
- Cash ratio calculatorCash ratio is a liquidity and working-capital metric, calculated as Cash and equivalents ÷ Current liabilities.Calculator
- DSO calculatorDSO is a liquidity and working-capital metric, calculated as (Ending AR ÷ Credit sales for the period) × Days in the period.Calculator
- Quick ratioQuick ratio is a liquidity and working-capital metric, calculated as (Cash and equivalents + Short-term investments + Accounts receivable) ÷ Current liabilities.Term
The formula is the one the glossary states, and the arithmetic is unit-tested. A ratio with nothing to divide by shows a dash — undefined is not zero. General information, not financial advice.