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Definition of Quick ratio - Finance dictionary

Quick ratio (See Chapter 12 of the Vernimmen)

The quick ratio is one of the liquidity ratios. It is the same as the current ratio, except that inventories are excluded from the calculation. This exclusion recognises that a portion of inventories corresponds to the minimum the company requires for its ongoing activity. Some inventory items have value only to the extent they are used in the production process. This ratio is calculated by dividing current assets (less than one year) excluding inventories by current liabilities (due in less than one year). Also called acid test ratio.

Quick ratio (See Chapter 12 of the Vernimmen)

The quick ratio is one of the liquidity ratios. It is the same as the current ratio, except that inventories are excluded from the calculation. This exclusion recognises that a portion of inventories corresponds to the minimum the company requires for its ongoing activity. Some inventory items have value only to the extent they are used in the production process. This ratio is calculated by dividing current assets (less than one year) excluding inventories by current liabilities (due in less than one year). Also called acid test ratio.

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Definitions of terms begining with the same letter as "Quick ratio" :

Q ratio
QIB
 Qualified Institutional Buyers, QIB
Qualified majority
 Queuing
Quick ratio

Quick ratio (See Chapter 12 of the Vernimmen)

The quick ratio is one of the liquidity ratios. It is the same as the current ratio, except that inventories are excluded from the calculation. This exclusion recognises that a portion of inventories corresponds to the minimum the company requires for its ongoing activity. Some inventory items have value only to the extent they are used in the production process. This ratio is calculated by dividing current assets (less than one year) excluding inventories by current liabilities (due in less than one year). Also called acid test ratio.

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