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A 1.5 times acid test on the same 180,000 book
Use the same snapshot as the working-capital page: 40,000 cash, 45,000 of receivables, 90,000 of inventory, and 5,000 of other current assets, against 35,000 of payables and 25,000 of other current liabilities. Current assets still total 180,000. Current liabilities still total 60,000.
Cash and equivalents: 25% lower
Change cash and equivalents to 30,000 while keeping the other example values the same.
Cash and equivalents: 25% higher
Change cash and equivalents to 50,000 while keeping the other example values the same.
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Quick answer
What does the Quick ratio calculate?
How many times do cash, receivables, and other near-cash assets cover amounts due inside a year? This calculator uses cash and equivalents, accounts receivable, inventory, other current assets, accounts payable, and other current liabilities to estimate near-cash cover for amounts due this year immediately in your browser.
With the values currently entered, the result is 1.5× — quick ratio. It also shows quick assets, current ratio, working capital, and current liabilities.
How to use the Quick ratio
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Cash and equivalents
- Accounts receivable
- Inventory
- Other current assets
- Accounts payable
- Other current liabilities
Quick ratio formula
Quick assets = current assets − inventory. Quick ratio = quick assets ÷ current liabilities. Current ratio = current assets ÷ current liabilities.
Assumptions
- An SEC computation of ratios exhibit writes the current ratio as current assets divided by current liabilities. The acid-test, or quick, line removes inventory from that coverage test.
- The SBA glossary lists cash, receivables, inventory, and other items that could convert to cash in less than one year as current assets, and amounts due within one year as current liabilities.
Verify the inputs
Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
Defines current assets, current liabilities, working capital, Days Receivable, Days Payable, GPM%, and break-even analysis from fixed cost, variable cost, and profit.
Computation of ratiosUS Securities and Exchange CommissionScope: SEC-filed ratio definitions; method is generalWrites the current ratio as current assets divided by current liabilities, and inventory turnover as total cost of sales divided by average inventory (beginning plus ending, divided by two).
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Quick ratio example and edge cases
The quick ratio asks whether cash, receivables, and other near-cash items cover amounts due inside a year. An SEC ratios exhibit writes the current ratio as current assets ÷ current liabilities. The acid-test line takes inventory out of that coverage test.
Example: A 1.5 times acid test on the same 180,000 book
Use the same snapshot as the working-capital page: 40,000 cash, 45,000 of receivables, 90,000 of inventory, and 5,000 of other current assets, against 35,000 of payables and 25,000 of other current liabilities. Current assets still total 180,000. Current liabilities still total 60,000.
- Cash and equivalents
- 40,000
- Accounts receivable
- 45,000
- Inventory
- 90,000
- Other current assets
- 5,000
- Accounts payable
- 35,000
- Other current liabilities
- 25,000
Calculated result1.5×quick ratio
Quick assets are 90,000 after inventory drops out. 90,000 ÷ 60,000 is 1.5. The current ratio on the same books is 3. Working capital is 120,000. Open the working capital calculator when you want that dollar cushion as the headline.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the multiple first. Then check quick assets. A ratio above 1 means near-cash items cover amounts due inside a year on this snapshot.
- The current-ratio line puts inventory back in. That is the looser test when stock can sell soon.
Edge cases worth checking
Most of the 45,000 is 90 days old
The acid test still counts it as near cash. Age that invoice on its own. A slow receivable is closer to inventory than to cash.
The unused credit line is not in the cash box
Unused credit is not a current asset on this snapshot. It can still pay a bill. Keep it in your head, not in the cash box, unless the lender already funded it.
What changes the result most
Cash and equivalents
Use a current amount for cash and equivalents. Include fees or recurring costs that belong in the same figure.
Accounts receivable
Use a current amount for accounts receivable. Include fees or recurring costs that belong in the same figure.
Inventory
Use a current amount for inventory. Include fees or recurring costs that belong in the same figure.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Cash and equivalents: 25% lower
30,0001.33×quick ratio
Cash and equivalents: 25% higher
50,0001.67×quick ratio
Accounts receivable: 25% higher
56,2501.69×quick ratio
Common mistakes
Check cash and equivalents
An SEC computation of ratios exhibit writes the current ratio as current assets divided by current liabilities. The acid-test, or quick, line removes inventory from that coverage test. Make sure this matches the number you enter.
Keep other current liabilities consistent
The SBA glossary lists cash, receivables, inventory, and other items that could convert to cash in less than one year as current assets, and amounts due within one year as current liabilities. Use the same units and time period throughout the calculation.
Do not rely on one quick ratio scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
How many times do cash, receivables, and other near-cash assets cover amounts due inside a year?
It does not replace a quote, contract, accountant, or local employment guidance.