Fundamental Glossary / Debt & Financial Stability
Quick Ratio
Current assets excluding inventory, divided by current liabilities. Also called the acid-test ratio.
Formula
(Cash + marketable securities + receivables) / current liabilities.
What it means
Inventory is the least liquid current asset and the one most likely to be worth less than its book value in a hurry. The quick ratio leaves it out.
A quick ratio around 1 means near-cash items cover near-term claims without a fire sale of stock.
How to read it
Use it next to the current ratio. A wide gap means the liquidity story depends on selling inventory.
What to watch
Receivables that are old or concentrated in one weak customer are not quick. Ageing, not the total, tells you that.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.