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   What is a quick ratio in finance?

   • In finance, the quick ratio, also known as the acid-test ratio, is a liquidity ratio that measures the ability of a company to use near-cash assets (or 'quick' assets) to extinguish or retire current liabilities immediately. It is the ratio between quick assets and current liabilities. A normal liquid ratio is considered to be 1:1.

   Quick ratio - Wikipedia

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   What is the difference between quick ratio and current ratio?

   • The quick ratio is different from the current ratio, as inventory and prepaid expense accounts are not considered in quick ratio because, generally speaking, inventories take longer to convert into cash and prepaid expense funds cannot be used to pay current liabilities.

   Quick Ratio - Formula, Example, Calculate, Template

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   Why is a quick ratio more conservative than a current ratio?

   • The quick ratio is more conservative than the current ratio because it excludes inventory and other current assets, which are generally more difficult to turn into cash. The quick ratio considers only assets that can be converted to cash in a short period of time. The current ratio, on the other hand, considers inventory and prepaid expense assets.

   Quick Ratio Formula With Examples, Pros and Cons - Investopedia

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   How is a quick ratio calculated?

   • It is calculated as the dollar value of a firm’s “quick” assets (cash equivalents, securities, and receivables), divided by the firm’s current debt. The quick ratio is often compared to the cash ratio and the current ratio, which include different assets and liabilities.

   Quick Ratio – Definition, Formula & Examples – MacroTrends

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   What is a good quick ratio?

   • A Quick Ratio of 1.0 or higher is generally considered healthy, indicating a company can meet its short-term obligations without selling inventory. Q. How does the Quick Ratio differ from the Current Ratio? The Quick Ratio excludes inventory, focusing on more liquid assets. The Current Ratio includes inventory and is a broader measure of liquidity.

   Quick Ratio: Definition, Formula, Uses - Investing.com

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   What is a quick ratio & why is it important?

   • The quick ratio has the advantage of being a more conservative estimate of how liquid a company is. Compared to other calculations that include potentially illiquid assets, the quick ratio is often a better true indicator of short-term cash capabilities. The quick ratio is also fairly easy and straightforward to calculate.

   Quick Ratio Formula With Examples, Pros and Cons - Investopedia

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2. www.investopedia.com › terms › qQuick Ratio Formula With Examples, Pros and Cons - Investopedia

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   Jun 19, 2024 · The quick ratio is a calculation that measures a company’s ability to meet its short-term obligations with its most liquid assets.

   • Video Duration: 2 min

3. corporatefinanceinstitute.com › resourcesQuick Ratio - Formula, Example, Calculate, Template

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   The Quick Ratio, also known as the Acid-test, measures the ability of a business to pay its short-term liabilities with assets readily convertible into cash.

4. www.macrotrends.net › definitions › quick-ratioQuick Ratio – Definition, Formula & Examples – MacroTrends

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   Quick Ratio Definition. The quick ratio is a metric which measures a firm’s ability to pay its current debts without selling additional inventory or raising additional capital. It is calculated as the dollar value of a firm’s “quick” assets (cash equivalents, securities, and receivables), divided by the firm’s current debt.

5. Videos

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     Quick Ratio (Acid Test Ratio)

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     Quick Ratio - Meaning, Formula, Calculation & Interpretations

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     Quick Ratio Formula With Examples, Pros and Cons

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6. www.investing.com › quick-ratio-definitionQuick Ratio: Definition, Formula, Uses - Investing.com

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   May 16, 2024 · The Quick Ratio, also known as the Acid-Test Ratio, is a financial metric used to assess a company’s short-term liquidity and its ability to cover its immediate financial obligations...

7. en.wikipedia.org › wiki › Quick_ratioQuick ratio - Wikipedia

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   Quick ratio. In finance, the quick ratio, also known as the acid-test ratio, is a liquidity ratio that measures the ability of a company to use near-cash assets (or 'quick' assets) to extinguish or retire current liabilities immediately. It is the ratio between quick assets and current liabilities. A normal liquid ratio is considered to be 1:1.

8. www.investopedia.com › terms › aAcid-Test Ratio: Definition, Formula, and Example - Investopedia

   www.investopedia.com › terms › a

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   May 21, 2024 · The acid-test ratio, also called the quick ratio, is a metric used to see if a company is positioned to sell assets within 90 days to meet immediate expenses.

9. www.accountingverse.com › quick-ratioQuick Ratio - Formula, Example, and Interpretation

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   The quick ratio, also known as acid-test ratio, is a financial ratio that measures liquidity using the more liquid types of current assets. Its computation is similar to that of the current ratio, only that inventories and prepayments are excluded.