Quick Assets Ratio

Quick Assets Ratio Also known as the quick ratio. A measure of the liquidity of a company, showing whether the company could meet its obligations from the current assets. The formula is: subtract inventory from current assets and divide the remainder by current liabilities. Ratios below 1:1 are considered low. However, high ratios may simply mean that although the company is cash rich, it is not using its assets effectively. Also known as the Acid Test ratio.

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