Investors evaluate a company's ability to satisfy short-term debts with liquid assets using the quick ratio. Find out how to calculate it, interpret it, and more.

Learn about the quick ratio, a crucial liquidity metric that helps investors assess a company's ability to meet short-term obligations. Learn how to calculate and interpret it for smarter ...

To calculate a company’s quick ratio, divide the value of its most liquid assets (i.e., those that can be converted to cash in under three months) by the value of its current liabilities ...

The quick ratio is also fairly easy and straightforward to calculate. It’s relatively easy to understand, especially when comparing a company’s liquidity against a target calculation such as 1.0.

A quick ratio works by providing a relatively fast assessment of a company's financial health.It's easy to calculate manually or in a spreadsheet. A company with a quick ratio of 1 suggests the ...

Calculate the quick ratio by subtracting the value of outstanding shares from current assets, and dividing the result by current liabilities. More For You. Operating Cash Flow to Total Assets.