## About This Tool

This online Quick Ratio Calculator is used to calculate the quick ratio.

## Quick Ratio Definition

In business, the quick ratio is obtained by subtracting inventories from current assets and then dividing by current liabilities. Generally, the quick ratio should be 1:1 or higher, however this varies widely by industry. In general, the higher the ratio, the greater the company's liquidity (i.e., the better able to meet current obligations using liquid assets). The quick ratio is also known as acid test ratio.

## Formula

The quick ratio calculation formula is as following:

Quick ratio = (Current assets - Current inventory) / Current liabilities