Quick Ratio Calculator
Immediate liquidity check.
Calculate the quick ratio from cash, receivables, securities, and current liabilities — the liquidity test that excludes inventory.
What this tool does
Quick ratio is (cash plus accounts receivable plus marketable securities) divided by current liabilities — a liquidity measure that excludes inventory. Enter your cash balance, receivable amounts, marketable securities, and current liabilities, and this calculator returns your quick ratio along with context bands. A ratio under 1 suggests limited short-term liquidity relative to obligations; between 1 and 2 indicates a middle ground; above 2 signals substantial liquid reserves. The result reflects your organisation's ability to cover immediate liabilities using only its most liquid assets. Current liabilities and cash position drive the calculation most heavily. This tool models a snapshot based on the figures you provide and is useful for comparing liquidity across periods or organisations. It does not account for seasonal fluctuations, credit access, or operational cash flows.
Enter Values
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Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
The quick ratio (or acid-test ratio) is a stricter version of the current ratio. It only counts assets that can be converted to cash quickly: cash itself, marketable securities, and accounts receivable. Inventory is excluded because it can take weeks or months to sell. The ratio compares these liquid assets against current liabilities.
200k cash + 150k receivables + 50k securities = 400k liquid assets. Against 300k current liabilities, quick ratio is 1.33 - healthy. Below 1.0 means the business couldn't pay its short-term bills if it had to liquidate immediately without selling inventory.
Retailers and restaurants often show poor quick ratios (0.3-0.7) because inventory is their biggest current asset. For them the current ratio tells a better story. Service businesses and SaaS companies typically run quick ratios of 1.5-3 because they have no inventory and healthy receivables. Compare against industry peers, not an absolute standard.
Run it with sensible defaults
Using cash of 200,000, accounts receivable of 150,000, marketable securities of 50,000, current liabilities of 300,000, the calculation works out to 1.33. The defaults are meant as a starting point, not a recommendation.
The levers in this calculation
The inputs — Cash, Accounts Receivable, Marketable Securities, and Current Liabilities — do not pull with equal force. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.
How the math works
Quick ratio = (cash + receivables + securities) ÷ current liabilities. Inventory excluded.
What to do with a low result
A disappointing result is information, not a judgement. Pick the single input that dragged the figure down most and focus the next quarter on that one factor. Breadth-first improvement rarely works; depth-first on the worst input usually does.
What this doesn't capture
The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.
££200,000 cash + ££150,000 receivables + ££50,000 securities ÷ ££300,000 liabilities = 1.33.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
The calculator computes the quick ratio by summing a company's most liquid assets—cash, accounts receivable, and marketable securities—then dividing by current liabilities. This ratio models a firm's ability to meet short-term obligations using only its most readily convertible resources, deliberately excluding inventory from the numerator since inventory conversion to cash is less immediate and certain. The calculation assumes all three asset categories are equally accessible and that current liabilities are due within the same period. The model does not account for collection delays on receivables, liquidity constraints on marketable securities, timing mismatches between asset realization and liability due dates, or operational factors that may affect actual cash flow.
References
Frequently Asked Questions
Why exclude inventory?
Is quick ratio more important than current ratio?
What does a quick ratio below 1 mean?
How do I improve quick ratio?
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