Calculate your business quick ratio (acid test) to assess short-term liquidity. See if your liquid assets can cover current liabilities without relying on inventory sales.
Bank accounts, petty cash
Stocks, bonds, money market
Money owed to you by customers
Current inventory value
Bills due within 12 months
Quick Ratio
1.50
Strong liquidity
Current Ratio
2.17
includes inventory
Net Working Capital
$70,000
Quick Assets
$90,000
cash + securities + AR
Current Assets
$130,000
quick assets + inventory
10% Revenue Drop
Minor slowdown in collections
1.45
adjusted quick ratio
Still solvent
25% Revenue Drop
Significant customer loss
1.38
adjusted quick ratio
Still solvent
50% AR Default
Major receivables write-off
1.25
adjusted quick ratio
Still solvent
The quick ratio (also called the acid-test ratio) measures your ability to pay short-term obligations using only your most liquid assets — cash, marketable securities, and accounts receivable. Unlike the current ratio, it excludes inventory and prepaid expenses, giving a more conservative view of whether your business can handle its near-term bills.
A quick ratio of 1.0 or higher is generally considered acceptable — it means you can cover all current liabilities with liquid assets. A ratio above 1.5 indicates strong liquidity. Below 1.0 means you may struggle to pay short-term obligations without selling inventory or getting a loan.
The current ratio includes all current assets (including inventory and prepaid expenses). The quick ratio excludes inventory because it cannot always be quickly converted to cash. The quick ratio is a more conservative and realistic measure of short-term liquidity.
Inventory may take weeks or months to sell, may need to be discounted, or may become obsolete. In a cash crunch, you cannot reliably convert inventory to cash quickly at full value. The quick ratio tests whether you can pay bills without relying on inventory sales.
Yes. A very high quick ratio (above 3.0) may mean you are holding too much cash that could be invested in growth, equipment, or paying down debt. It could signal overly conservative management. The ideal is enough liquidity to cover obligations with a safety margin.
Working Capital Calculator
Calculate your net working capital, current ratio, and quick ratio. Assess your business's short-term liquidity and ability to cover upcoming obligations.
Debt-to-Equity Ratio Calculator
Calculate your debt-to-equity ratio, debt ratio, and equity ratio. Understand your company's financial leverage and how it compares to industry standards.