Acid-Test (Quick) Ratio Calculator
The Acid-Test Ratio (also known as the Quick Ratio) measures a company’s ability to meet its short-term obligations with its most liquid assets. A ratio of 1 or higher is generally considered healthy.
About the Acid-Test Ratio
Formula: (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities
Interpretation:
- Ratio < 1: The company may have difficulty meeting its short-term obligations
- Ratio = 1: The company can exactly cover its current liabilities with liquid assets
- Ratio > 1: The company has more than enough liquid assets to cover current liabilities
Note: Ideal ratios vary by industry. Compare with industry benchmarks for best analysis.