Quick Ratio Calculator

This calculator helps you determine the quick ratio, also known as the acid-test ratio, which is a financial metric used to evaluate a company’s short-term liquidity. Here’s how you can use it:

Quick ratio:

  1. Input Current Assets: Enter the total current assets of the company in the provided field.
  2. Input Current Inventory: Enter the value of the current inventory in the designated field.
  3. Input Current Liabilities: Enter the total current liabilities of the company.
  4. Calculate Quick Ratio: Click on the “Calculate” button to compute the quick ratio.
  5. View Result: The calculated quick ratio will be displayed below the button.

Formula: The quick ratio is calculated using the formula:

Quick Ratio = (Current Assets - Current Inventory) / Current Liabilities

Example Calculation: Suppose a company has $100,000 in current assets, $20,000 in current inventory, and $50,000 in current liabilities.

Quick Ratio = (100,000 - 20,000) / 50,000 = 80,000 / 50,000 = 1.6

This means the company has $1.6 in liquid assets available to cover each dollar of current liabilities.

Feel free to input different values for current assets, current inventory, and current liabilities to assess the company’s short-term liquidity position.

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