💧Liquidity Ratios

Quick Ratio (Acid-Test)

(Cash + Marketable Securities + Accounts Receivable) ÷ Current Liabilities = Quick Ratio

What It Means

Can you pay bills without selling inventory? Stricter test.

✓1.0 or higher is generally healthy

Cash:$30,000

Marketable Securities:$10,000

Accounts Receivable:$40,000

Current Liabilities:$60,000

($30,000 + $10,000 + $40,000) ÷ $60,000

Quick Ratio = 1.33

→ Can cover obligations without selling inventory

Current Assets ÷ Current Liabilities = Current Ratio

(Cash + Cash Equivalents) ÷ Current Liabilities = Cash Ratio

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