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| (Current assets <i>less</i> Inventories) / Current liabilities.
| | ''Regulation - governance.'' |
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| The quick ratio gives a very rough indication of the liquidity (or solvency) of the reporting entity.<br />
| | Self-Regulatory Organisation |
| If the quick ratio were to fall below 1.0, this would indicate that the entity would not be able to meet its current liabilities out of its cash in hand and the proceeds of its other current assets (excluding inventories).
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| <b>Example</b><br />
| | ==See also== |
| Current assets (excluding inventories) = £3m. <br />
| | * [[Governance]] |
| Current liabilities = £4m. <br />
| | * [[NASDAQ]] |
| | * [[New York Stock Exchange]] (NYSE) |
| | * [[RPB]] |
| | * [[Self-regulation]] |
| | * [[Self-regulatory organisation]] |
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| The Quick ratio is: <br />
| | [[Category:Accounting,_tax_and_regulation]] |
| = 3 / 4 <br />
| | [[Category:The_business_context]] |
| = 0.75.
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| The quick ratio is also known as the Acid test or the Acid test ratio.<br />
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| Inventories are sometimes also known as Stock.
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| == See also ==
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| * [[Balance sheet ratio]]
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| * [[Current assets]]
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| * [[Current liabilities]]
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| * [[Current ratio]]
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| * [[Inventory]]
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| * [[Liquidity]]
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| * [[Stock]]
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| [[Category:Liquidity_management]] | |
Latest revision as of 13:22, 30 June 2022
Regulation - governance.
Self-Regulatory Organisation
See also
