Definition: Quick Ratio | Tackle Trading: The #1 rated trading education platform

Quick Ratio

The quick ratio is a measure of a company’s short-term liquidity, and ability to meet its short-term debt obligations with its most liquid assets.

The quick ratio excludes inventories from current assets because this metric is only concerned with the most liquid assets,

Quick ratio calculation:

Quick ratio = (current assets – inventories) / current liabilities)

Quick ratio = (cash and equivalents + marketable securities + accounts receivable) / current liabilities

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