ES
Home › Calculators › Quick Ratio Calculator

Quick Ratio Calculator

Test whether a business could pay its short-term bills without selling any inventory. Enter cash, marketable securities and receivables, or current assets minus inventory, and current liabilities to get the quick (acid-test) ratio, the cash ratio and what the result means.

Last updated:

Method
Quick assets
$
$

Short-term investments you can sell quickly.

$

After the allowance for doubtful accounts.

$
$

Excluded from quick assets.

$

Excluded from quick assets.

Liabilities
$
Optional extras
$

For the defensive interval (days of cover).

$
$
Enter your values to see the result.
Advertisement
Advertisement

How to use the Quick Ratio Calculator

  1. Pick a method: add up liquid assets, or start from total current assets and subtract inventory and prepaid expenses.
  2. Enter the balance sheet figures: cash, marketable securities and net receivables, or current assets, inventory and prepaid expenses.
  3. Enter current liabilities and, if you like, a target ratio other than 1.
  4. Add annual cash operating expenses to see how many days liquid assets would last.
  5. Read the quick ratio and compare it with the cash ratio and current ratio.

Quick ratio formula and example

  • Quick ratio = (cash + marketable securities + accounts receivable) ÷ current liabilities
  • Shortcut = (current assets − inventory − prepaid expenses) ÷ current liabilities
  • Cash ratio = (cash + marketable securities) ÷ current liabilities
  • Defensive interval = quick assets ÷ daily cash operating expenses

Example: a wholesaler has cash of $45,000, securities of $15,000 and receivables of $70,000, so quick assets are $130,000. With current liabilities of $150,000 the quick ratio is 130,000 ÷ 150,000 = 0.87. Adding inventory of $90,000 and prepaid expenses of $10,000 gives a current ratio of 1.53: the business depends on selling its stock to cover all its short-term bills.

What counts as a quick asset

ItemQuick asset?Why
Cash, checking and savings balancesYesAlready cash
Cash equivalents (Treasury bills, money market funds)YesConvert to cash within days at a known value
Marketable securitiesYesListed investments that can be sold quickly
Accounts receivable, net of bad-debt allowanceYesUsually collected within 30–90 days
InventoryNoMust be sold first, possibly at a discount
Prepaid expensesNoAlready spent; cannot be turned back into cash
Long-term or restricted depositsNoNot available within the year

Improving the quick ratio

  • Collect receivables faster: tighter credit terms and prompt invoicing turn sales into cash sooner. Track it with days sales outstanding.
  • Hold less inventory: selling slow-moving stock converts a non-quick asset into cash.
  • Refinance short-term debt into long-term debt, which removes it from current liabilities.
  • Look at the trend: a quick ratio drifting lower over several periods matters more than a single reading.

Frequently asked questions

What is the quick ratio formula?

Quick ratio = (cash + marketable securities + accounts receivable) ÷ current liabilities. An equivalent shortcut is (current assets − inventory − prepaid expenses) ÷ current liabilities. With $130,000 of quick assets and $150,000 of current liabilities, the quick ratio is 0.87.

Why is it called the acid-test ratio?

The name comes from the old practice of testing metal with acid to see if it was real gold. The ratio is a similarly strict test of liquidity: it asks whether a business can meet its short-term obligations using only assets that are already cash or close to it.

What is a good quick ratio?

A quick ratio of 1 or more means liquid assets cover current liabilities, which is the traditional benchmark. Retailers and restaurants that sell inventory for cash quickly often run below 1 safely, while a software or service company would normally be well above it. Compare within the same industry.

Why is inventory excluded?

Inventory has to be sold, and often sold on credit and then collected, before it becomes cash, and in a hurry it may only sell at a discount. Prepaid expenses are excluded because they cannot be turned back into cash. Leaving both out gives a conservative view of liquidity.

What is the difference between the quick ratio and the cash ratio?

The cash ratio is stricter still: it counts only cash and marketable securities, leaving out receivables, because customers might pay late or not at all. The quick ratio sits between the cash ratio and the current ratio.

What is the defensive interval?

The defensive interval ratio estimates how many days a business could keep paying its cash operating expenses from quick assets alone, with no new revenue: quick assets ÷ (annual cash operating expenses ÷ 365).

Are all the tools on FreeToolCabin tested for quality and accuracy?

Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.

Related tools

Current Ratio CalculatorCurrent assets ÷ current liabilities with interpretation, working capital and target solver.Working Capital CalculatorNet working capital plus current, quick and cash ratios from your balance sheet.Days Sales Outstanding CalculatorDSO, receivables turnover and average collection period from AR and credit sales.Interest Coverage Ratio CalculatorTimes interest earned (EBIT ÷ interest), EBITDA coverage, interpretation and stress test.Altman Z-Score CalculatorBankruptcy-risk Z-score for public, private and non-manufacturing companies, with zones.Accounts Payable Turnover CalculatorAP turnover from COGS or purchases and average payables, plus days payable outstanding.Profit Margin CalculatorGross margin, markup, cost or price: solve for any one, single or bulk.Receipt MakerFill in a receipt template with items and tax, then print or save PDF.Car Depreciation CalculatorEstimate your car's value over time and its projected resale price.CTR CalculatorCalculate click-through rate and compare it with industry benchmarks.Conversion Rate CalculatorCalculate e-commerce conversion rate, revenue per visitor and goals.CPM CalculatorSolve CPM, cost, impressions, CTR and CPC for ad campaigns.Quote Estimate GeneratorCreate a quote or estimate with line items and tax, then save as PDF.ROAS Calculator (Return on Ad Spend)Calculate ROAS, break-even ROAS and profit for each ad channel.Customer Lifetime Value CalculatorCalculate customer lifetime value, LTV:CAC ratio and CAC payback from ARPU and churn.Churn Rate CalculatorCalculate customer churn and retention rates and convert monthly churn to annual.YouTube Money CalculatorEstimate YouTube earnings per day, month and year from views and RPM by niche.Instagram Engagement Rate CalculatorCalculate Instagram engagement rate by followers or reach and compare it to benchmarks.Ecommerce Profit CalculatorNet profit, margin, markup and break-even ROAS per order after fees, ads and returns.Amazon FBA CalculatorEstimate Amazon FBA fees, profit per unit, margin, ROI and break-even price.Etsy Fee CalculatorEtsy listing, transaction, processing and Offsite Ads fees, payout and net profit.eBay Fee CalculatoreBay final value fee, per-order fee, ad fees, payout and net profit on any sale.Stock Profit CalculatorStock trade profit and % return after commissions, plus the break-even sell price.Dollar Cost Averaging CalculatorSee units bought, average cost, value and profit for regular buys at your own price list.Startup Runway CalculatorProject cash, burn rate and runway month by month, with growth, break-even and zero-cash date.Break Even CalculatorFind break-even units and revenue, contribution margin, margin of safety and a cost-volume chart.SaaS Pricing CalculatorModel flat, per-seat, tiered and volume plans with annual discounts to get MRR, ARR and ARPU.Employee Cost CalculatorWork out the true cost of an employee: payroll taxes, benefits, overhead and real hourly cost.Inventory Turnover CalculatorInventory turnover ratio and days inventory outstanding from COGS or sales and average stock.Markup CalculatorFind the selling price from cost and markup, or the markup and margin from cost and price.Unit Price CalculatorCompare up to 4 products by price per ounce, pound, liter or item and find the best deal.Cap Rate CalculatorCalculate a rental property's NOI, cap rate and optional cash-on-cash return.Depreciation CalculatorStraight-line, declining balance, double declining and sum-of-years depreciation schedules.Crypto Profit CalculatorCalculate crypto trade profit, ROI and break-even price after buy and sell fees.PayPal Fee CalculatorWork out PayPal fees, what you receive, and how much to ask for to get an exact amount.Stripe Fee CalculatorCalculate Stripe fees and payouts, or how much to charge to receive an exact amount.Net Promoter Score CalculatorCalculate NPS from promoter, passive and detractor counts or pasted 0–10 survey scores.CPC CalculatorCalculate cost per click from ad spend and clicks, plus CPM, CTR, CPA and ROAS.EBITDA CalculatorEBITDA, EBIT and EBITDA margin from net income or from revenue and operating expenses.Employee Turnover Rate CalculatorTurnover rate from headcount and separations, with annualized rate and retention.Startup Equity Dilution CalculatorCap table before and after a funding round with option pool top-up and dilution per holder.Fiverr Fee CalculatorFiverr seller earnings, buyer total with fees, and the gig price for a target.Gross Rent Multiplier CalculatorFind the GRM of a rental, estimate value from GRM and rent, or the rent a target GRM needs.Influencer Rate CalculatorEstimated price range per post, story or video from followers and engagement.Invoice Due Date CalculatorFind the due date for Net 30, Net 60, EOM or custom terms and the days left or overdue.Book Royalty CalculatorRoyalty per sale and monthly earnings for eBooks and paperbacks after printing costs.Landed Cost CalculatorTotal landed cost and cost per unit of imported goods, with duty, freight, fees and pricing.Late Payment Interest CalculatorCalculate days late, late interest and total due on an overdue invoice.LTV to CAC Ratio CalculatorLTV, CAC, the LTV:CAC ratio, payback months and a health rating for your unit economics.Marketing Budget CalculatorMarketing budget from % of revenue or customer goals, split by channel per year and month.Mercari Fee CalculatorMercari selling and processing fees, earnings and profit, with editable rates.MRR CalculatorMonthly recurring revenue, ARR, net new MRR, growth rate and ARPU from your plans.Net Revenue Retention CalculatorNRR and GRR from expansion, contraction and churn, with annualized NRR for monthly data.Net Operating Income CalculatorNOI for rental property: rent, vacancy, other income and itemized expenses with expense ratio.Options Profit CalculatorProfit or loss at expiry for calls and puts, break-even, max profit/loss and a payoff chart.Poshmark Fee CalculatorPoshmark fee, earnings and profit, or the list price needed for your payout.Pre Money Post Money Valuation CalculatorPost-money valuation, investor and founder ownership and price per share for a funding round.Price Elasticity of Demand CalculatorFind the price elasticity of demand with the midpoint or simple method, plus revenue change.Freelance Project Price CalculatorTurn a task list with hours into a project quote with contingency, profit, tax and deposit.Rental Property Cash Flow CalculatorMonthly cash flow, NOI, cap rate, cash-on-cash return and the 1% rule for a rental property.Return on Assets CalculatorROA from net income and average total assets, plus operating ROA and adjusted ROA.Return on Equity CalculatorROE from net income and average equity, with a 3-step DuPont breakdown of what drives it.Rule of 40 CalculatorSaaS Rule of 40 score from revenue growth and profit margin, with pass/fail and the gap.Sales Funnel CalculatorCustomers, SQLs, MQLs, leads and visitors needed to hit a revenue goal.Shopify Fee CalculatorShopify fees by plan, payout, profit and margin, with third-party gateway fees.Solar Payback Period CalculatorSolar panel payback years, 25-year savings, ROI and cost per kWh with a cash-flow chart.Square Fee CalculatorSquare processing fees, net deposit and the price to cover fees by payment method.Tiered Pricing CalculatorPrice a quantity with tiers: total, per-tier breakdown and unit price, graduated or volume.
See all 209 Business & Marketing Calculators →