Question by  Tegi (9)

What are quick ratios?

I need to understand what quick ratios are.


Answer by  Chaneygirl (1755)

It is the current assets of a company, less its inventory and divide by current liabilities. The number is designed to show a companies ability to meet it's current obligation in the short term.


Answer by  EarlOfSandwich (177)

The quick ratio is calculated by dividing current assets minus inventories by current liabilities. It measures a firm's liquidity and ability to meet its near term obligations.


Answer by  MikeyMovies (27)

(Current assets - Inventory) / Liabilities. It basically shows if a company can handle its current debts. Higher ratios are better since more assets and less liability equals better financial strength.

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