Quick Ratio

Definition

The Quick Ratio, also known as the acid-test ratio, is a measure of a company's ability to meet its short-term obligations with its most liquid assets, providing insight into its financial health.

Usage and Context

The quick ratio shows how well a company can pay its short-term debts with its liquid assets.

Frequently Asked Questions

What is quick ratio also known as acid test ratio?
The quick ratio, or acid test ratio, shows if a company can pay short-term liabilities using its most liquid assets.

What does the quick ratio measure?
The quick ratio shows if a company can pay its short-term debts with its most liquid assets.

What does the quick ratio or acid test ratio indicate?
The quick ratio indicates a company's ability to pay its short-term debts using its most liquid assets.

Benefits

The quick ratio measures a company's ability to meet short-term obligations using liquid assets.

Conclusion

The quick ratio measures how well a company can cover short-term debts using its most liquid assets.