Quick Ratio Calculator
The quick ratio, also called the acid-test ratio, measures a company's ability to meet short-term obligations using its most liquid assets. It excludes inventory and other less-liquid current assets to provide a conservative view of liquidity.
This tool provides two accepted approaches: the standard acid-test formula (current assets minus inventory) and a liquid-assets aggregation (cash, marketable securities, and receivables). Choose the method that best matches your reporting convention and data quality.
Governance
Record 9dc701722e28 • Reviewed by Fidamen Standards Committee
Uses current assets less inventory divided by current liabilities. Best when inventories are not readily convertible to cash within the short term.
Inputs
Results
Quick Ratio (acid-test)
1.6
Liquid Current Assets (Current Assets − Inventory)
$80,000.00
| Output | Value | Unit |
|---|---|---|
| Quick Ratio (acid-test) | 1.6 | ratio |
| Liquid Current Assets (Current Assets − Inventory) | $80,000.00 | USD |
Visualization
Methodology
Standard acid-test: subtract inventory from current assets and divide by current liabilities. Use when inventory turnover is slow or inventory may not be easily converted to cash.
Liquid-assets aggregation: sum cash and cash equivalents, marketable securities, and accounts receivable, then divide by current liabilities. Use when you prefer an explicitly cash-focused measure.
Ensure input values are taken from the same reporting date and properly netted (for example, use net receivables after allowances). Where possible, reconcile with audited balances and apply consistent currency and reporting period.
Worked examples
Example (Standard): Current assets = 100,000; Inventory = 20,000; Current liabilities = 50,000 → (100,000 − 20,000) ÷ 50,000 = 1.60.
Example (Liquid-assets): Cash = 15,000; Marketables = 5,000; Receivables = 30,000; Current liabilities = 50,000 → (15,000 + 5,000 + 30,000) ÷ 50,000 = 1.00.
F.A.Q.
Which method should I use?
Use the standard acid-test method for general financial analysis and comparability. Use the liquid-assets aggregation when you require a cash-centric view of immediate liquidity. Document your choice for consistent reporting.
Are allowances, discounts, or write-offs applied to receivables?
Inputs should use net receivables after allowances and expected credit losses. This preserves conservative measurement and aligns with common accounting practice.
What are typical interpretation thresholds?
A quick ratio above 1.0 generally indicates sufficient liquid assets to cover current liabilities, but acceptable thresholds vary by industry, business model, and seasonal cycles. Use industry benchmarks and trend analysis rather than a single cutoff.
What are the main limitations?
The quick ratio is a point-in-time metric and does not reflect cash flow timing, contingent liabilities, or access to credit lines. It depends on accurate, consistently prepared balance sheet inputs.
How accurate are the results and what controls are recommended?
Results are as accurate as the input data. Follow documentation, reconciliation, and access-control practices consistent with NIST controls for data integrity and ISO quality management guidance. Validate inputs against source ledgers and apply software testing best practices when automating calculations.
Sources & citations
- National Institute of Standards and Technology (NIST) — https://www.nist.gov
- International Organization for Standardization (ISO) — https://www.iso.org
- Institute of Electrical and Electronics Engineers (IEEE) — https://www.ieee.org
- Occupational Safety and Health Administration (OSHA) — https://www.osha.gov
- SEC — Non-GAAP Financial Measures Guidance — https://www.sec.gov/corpfin/non-gaap-financial-measures
- FASB — Financial Accounting Standards Board — https://www.fasb.org/
- CFA Institute — Global Investment Performance Standards (GIPS) — https://rpc.cfainstitute.org/gips-standards
Further resources
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
Record ID: 9dc701722e28What changed (latest)
v1.0.0 • 2025-11-22 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
What changed (latest)
v1.0.0 • 2025-11-22 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Engine
v1.0.0
Data
Baseline (no external datasets)
Content
v1.0.0
UI
v1.0.0
Governance
Last updated: Nov 22, 2025
Reviewed by: Fidamen Standards Committee (Review board)
Credentials: Internal QA
Risk level: low
Reviewer profile (entity)
Fidamen Standards Committee
Review board
Internal QA
Entity ID: https://fidamen.com/reviewers/fidamen-standards-committee#person
Semantic versioning
- MAJOR: Calculation outputs can change for the same inputs (formula, rounding policy, assumptions).
- MINOR: New features or fields that do not change existing outputs for the same inputs.
- PATCH: Bug fixes, copy edits, or accessibility changes that do not change intended outputs except for previously incorrect cases.
Review protocol
- Verify formulas and unit definitions against primary standards or datasets.
- Run golden-case regression suite and edge-case suite.
- Record reviewer sign-off with credentials and scope.
- Document assumptions, limitations, and jurisdiction applicability.
Assumptions & limitations
- Uses exact unit definitions from the Fidamen conversion library.
- Internal calculations use double precision; display rounding follows the unit's configured decimal places.
- Not a substitute for calibrated instruments in regulated contexts.
- Jurisdiction-specific rules may require official guidance.
Change log
v1.0.0 • 2025-11-22 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Areas: engine, content, ui • Reviewer: Fidamen Standards Committee • Entry ID: f2bb9192d100