Quick Ratio Calculator

Defination / Uses

The quick rate (acid- test rate) is a simple index used to measure the capability of a company to meet its short- term scores with its most liquid means. In other words, the quick rate allows you to determine whether or not a company has enough coffers to fulfill its scores that are due within a time. A veritably analogous to quick rate index of liquidity is current rate.

A quick rate equal to1.0 means that the value of a company’s means that are precisely convertible to cash exactly match its current arrears. The quick rate lower than 1 indicates that a company, at a particular moment, isn't suitable to completely pay back its current scores. It leads to the conclusion that the optimal value of the quick rate (acid rate) is1.0 or advanced.