Quick or Acid Test Ratio

Quick or Acid Test Ratio Calculation







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Out put

Quick or Acid Test ratio formula & calculator to find the ratio between the sum of cash, cash equivalents, marketable or short term securities and account receivables to current liabilities of a company. It is a financial liquidity assessment tool to measure the ability of a company to meet its short term obligations. A higher quick ratio usually more than 1 indicates that the company has more capability to deal with its short term debt obligations and a lower acid test ratio usually lesser than 1 indicates that the company may not be able to deal with its short term debts would result the company to sell its assets to pay off the short term debt obligations.

Formula
Quick or Acid Test Ratio = (Cash + Cash Equivalents + Short-term Securities + Account Receivables)/Current Liabilities