The Quick Ratio calculator can be used to derive the quick ratio. You may choose between the following two methods in order to calculate the quick ratio:
Method 1:
The first method is based on the following formula:
Cash & Cash Equivalent + Marketable Securities + Accounts Receivable
Quick Ratio = Current Liabilities
Enter your values in the calculator:
Method 2:
The second method is based on the following formula:
Current Assets - Inventory - Prepaid Expenses
Quick Ratio = Current Liabilities
Enter your values in the calculator:
How to Use the Quick Ratio Calculator
Method 1:
Let’s now review a simple example to see how to use the calculator.
Suppose that your goal is to derive the quick ratio, given the following information:
- Cash and Cash Equivalent = 15000
- Marketable Securities = 10000
- Accounts Receivable = 2500
- Current Liabilities = 23000
Plug the above values in the calculator, and then click on the ‘Calculate Quick Ratio‘ button:
You’ll then get the quick ratio of 1.196:
You could also derive the quick ratio manually using this formula:
Cash & Cash Equivalent + Marketable Securities + Accounts Receivable
Quick Ratio = Current Liabilities
Plug the values in the formula, and you’ll get the same quick ratio of 1.196:
15000 + 10000 + 2500
Quick Ratio = 23000 = 1.196
Method 2:
Alternatively, let’s say that your goal is to calculate the quick ratio, based on the information below:
- Current Assets = 31000
- Inventory = 2500
- Prepaid Expenses = 1000
- Current Liabilities = 23000
Plug the values in the calculator, and then press on the button to get the quick ratio:
You’ll then get the quick ratio of 1.196:
Alternatively, you could derive the quick ratio using the formula below:
Current Assets - Inventory - Prepaid Expenses
Quick Ratio = Current Liabilities
You’ll get the same quick ratio of 1.196:
31000 - 2500 - 1000
Quick Ratio = 23000 = 1.196