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Finance Tool — Quick Ratio (Acid Test)

Quick Ratio Calculator — Test Your Immediate Liquidity

Calculate the quick ratio (acid test) to measure how well your liquid assets cover current liabilities without relying on inventory.

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Formula & How It Works

Quick Ratio = (Cash + Receivables + ST Investments) ÷ Current Liabilities
Cash Ratio = Cash & Bank ÷ Current Liabilities
Target: Quick Ratio ≥ 1.0

Worked Example

Scenario: Cash ₹5L, Debtors ₹30L, ST Investments ₹2L, CL ₹23L.

Quick Assets = ₹37L | QR = 37÷23 = 1.61x (Good)

When to Use This Calculator

  • Bank loan application financial ratios
  • CA statutory audit working papers
  • Investor pitch financial health section
  • Monthly CFO dashboard
  • Assess ability to pay creditors without selling stock

Frequently Asked Questions

Quick Ratio = (Cash + Receivables + Short-term Investments) ÷ Current Liabilities. Also called Acid Test Ratio.
Inventory may take time to sell and convert to cash. Quick ratio gives a more conservative view of immediate liquidity.
1.0 or above is generally acceptable. Below 0.5 is a warning sign.
Current ratio includes inventory; quick ratio excludes it. Quick ratio is more conservative and is preferred by lenders.
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