Quick Ratio Formula: Finance Explained

Quick Ratio Formula: Finance Explained quick ratio ratio and the quick ratio The current ratio is the ratio of current assets to current liabilities: Current ratio = Current assets Current liabilities current quickbet Cash $ 20,000 $10,000 Accounts receivable 100,000 70,000 Inventory 70,000 80,000 Other 20,000 20,000 **42 McKeon Company's debt-to-total-asset ratio at 12

quickbet A higher quick ratio means a higher liquidity and a lower risk of insolvency A general rule of thumb is that a quick ratio of 1 or more is considered good, as

quick ratio Similar to the current ratio, the quick ratio provides insights into a company's liquidity position A quick ratio greater than 1 indicates that Quick Ratio shows how liquid a company is It is calculated by dividing its total current assets by its liabilities