Add these assets to find the numerator then use the number on the balance sheet for current liabilities as the denominator. The test measures a companys ability to pay back its bills with business assets that may readily convert to cash. Quick ratio Quick assets.
Cash Marketable Securities Accounts Receivable Current Liabilities Quick Ratio Marketable securities are financial instruments that.
In the above Quick ratio formula Quick assets refer to the assets that can be converted into cash within a period of 90 days. The formula for quick ratio is. The quick ratio is a simple formula thats calculated by first adding up a companys cash-on-hand and any other cash equivalents such as accounts receivable amounts short-term investments and marketable securities. The quick ratio is calculated by adding cash cash equivalents short-term investments and current receivables together then dividing them by current liabilities.