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| "I'm going crazy about quick ratios!! Whoa who are you?!?!" |
Today I wanted to discuss the Quick Ratio. The quick ratio is an indicator of a company's short-term liquidity. The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets
. The higher the quick ratio, the better the position of the company.
Quick ratio can also be referred to as the acid test or acid test ratio. Quick ratio is found by dividing current assets minus inventories by current liabilities. Quick ratio is considered a more conservative measure of liquidity then the current ratio.
Remember the higher the current ratio, the better the companies finacial position!
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