Quick Ratio Calculator
Check short term financial health. Enter current assets, inventory and current liabilities — the quick ratio appears with a plain English interpretation.
Your numbers
Result
How to use
- Enter your current assets (cash, bank, receivables, stock).
- Enter the value of inventory, which is excluded from the strict test.
- Enter current liabilities — bills and debts due within a year.
- Press Calculate Quick Ratio to see the ratio and a plain English verdict.
Formula: quick ratio = (current assets − inventory) ÷ current liabilities.
Tips
- A ratio of 1 means you can pay every short term bill without selling stock.
- Below 0.5 is a cash crunch warning — collect receivables faster or cut stock levels.
- Well above 2 may mean cash is sitting idle instead of being put to work.
- Compare the ratio month to month rather than judging one snapshot alone.
Frequently Asked Questions (FAQ)
What is the quick ratio?
The quick ratio measures whether a business can pay its short term bills without selling inventory. It is calculated as (current assets minus inventory) divided by current liabilities.
What is a good quick ratio?
A quick ratio of 1 or above is generally healthy, meaning the business can cover its current liabilities without selling inventory. Below 1 suggests cash may run short if bills come due at once.
How is the quick ratio different from the current ratio?
The current ratio includes all current assets, while the quick ratio removes inventory because stock can be slow to convert into cash. The quick ratio is the stricter test of short term liquidity.
What numbers do I enter?
Current assets, inventory (stock) and current liabilities. The tool divides quick assets, that is current assets minus inventory, by current liabilities.