Understanding Quick Ratio-Definition, Advantages and Limitations

quick ratio  The quick ratio is used to evaluate whether a business has enough liquid assets that can be converted into cash to pay its bills The key A quick ratio of 1 or above indicates that the company has sufficient liquid assets to satisfy its short-term obligations An extremely high

A quick ratio of :1 means you have a dollar's worth of easily convertible assets for each dollar of your current liabilities Though acceptable ratios can Quick Ratio Formula Accounting · Quick Ratio = Cash & Equivalents + Accounts Receivable Current Liabilities · Does the company have

Quick Ratio Conclusion · Quick assets are current assets that a company can convert into cash within the short term · To calculate the Quick ratio only uses quick assets and excludes any assets that can't be liquidated and converted into cash in 90 days or less The current ratio considers all