Definition
The quick ratio is a financial metric that measures a company�s ability to pay off its short-term liabilities with its most liquid assets, excluding inventory.
Related Services
Financial analysis, liquidity management, and cash flow consulting help businesses assess their short-term financial health using the quick ratio.
Problem and Application
A quick ratio less than 1 indicates potential liquidity issues, while a ratio above 1 suggests that the business can cover its immediate liabilities.
Conclusion
The quick ratio is an essential liquidity indicator, helping businesses assess their ability to meet short-term obligations without relying on inventory.
