quick ratio

quick ratio
A commonly used, but not always accurate, proxy for a firm's liquidity. The quick ratio is calculated by subtracting inventory from current assets and then dividing the result by current liabilities.
Sometimes called the acid test ratio. American Banker Glossary
indicator of a company's financial strength (or weakness). Calculated by taking current assets less inventories ( inventory), divided by current liabilities. This ratio provides information regarding the firm's liquidity and ability to meet its obligations. Also called the acid test ratio. Bloomberg Financial Dictionary
See acid test ratio. Dresdner Kleinwort Wasserstein financial glossary

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quick ratio quick ratio ratio

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   Sometimes called the acid test, the quick ratio is an indicator of a company's ability to meet its short-term liabilities. It is the total of a company's cash plus accounts receivable plus short-term investments divided by its current liabilities. The higher the number, the healthier the position, and within an industry, high quick ratios suggest relatively high liquidity. The quick ratio is similar to the current ratio, which is a less stringent test because it adds inventory (which may not always be easy to sell quickly) to cash, accounts receivable and short-term investments before dividing by current liabilities.
   ► See also Current Ratio.

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quick ratio UK }} US }} noun [S] ACCOUNTING
ACID TEST RATIO(Cf. ↑acid test ratio)

Financial and business terms. 2012.

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Look at other dictionaries:

  • quick ratio — See acid test ratio. Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010 …   Law dictionary

  • Quick ratio — Indicator of a company s financial strength (or weakness). Calculated by taking current assets less inventories, divided by current liabilities. This ratio provides information regarding the firm s liquidity and ability to meet its obligations.… …   Financial and business terms

  • Quick Ratio — An indicator of a company s short term liquidity. The quick ratio measures a company s ability to meet its short term obligations with its most liquid assets. The higher the quick ratio, the better the position of the company. The quick ratio is… …   Investment dictionary

  • Quick ratio — In finance, the Acid test or quick ratio or liquid ratio measures the ability of a company to use its near cash or quick assets to immediately extinguish or retire its current liabilities. Quick assets include those current assets that presumably …   Wikipedia

  • Quick Ratio — Liquiditätsgrade sind insbesondere in der Unternehmensfinanzierung und der Finanzbuchhaltung verwendete betriebswirtschaftliche Kennzahlen, mit denen die Fähigkeit eines Unternehmens, seinen Zahlungsverpflichtungen fristgerecht nachzukommen,… …   Deutsch Wikipedia

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  • quick ratio — (Economics) ratio between the current debts of a company and its current liquid assets (measures the company s ability to fulfill its financial obligations over the short term) …   English contemporary dictionary

  • quick ratio — See: liquid ratio …   Accounting dictionary

  • quick ratio — An alternative term for the *acid test ratio …   Auditor's dictionary

  • quick ratio — /kwɪk reɪʃiəυ/ noun same as liquidity ratio …   Dictionary of banking and finance

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