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  •     QAD Glossary

  • Quick Ratio
    The Quick Ratio, which is also known as the acid-test ratio or the quick assets ratio, is an indicator of a company’s short-term liquidity. This ratio measures a company’s ability to meet its short-term obligations with its liquid assets. The higher the Quick Ratio, the better the position the company is in.
    The Quick Ratio is more conservative than the Current Ratio, a more well-known liquidity measure, because it excludes inventory from current assets. Inventory is excluded because some companies have difficulty turning their inventory into cash. There are situations when short-term obligations must be paid off immediately that the current ratio would overestimate a company’s short-term financial strength.
    The quick ratio is calculated as:
    Quick Ratio = (Current Assets - Inventories) / Current Liabilities
    Navigation
    The Quick Ratio for the Last 12 Months chart is linked to a grid that shows the quick ratio details.

    Navigation Overview for the Quick Ratio
    Quick Ratio for the Last 12 Months Chart
    This chart shows the quick ratio for the last 12 months for the entity and currency type that you select from the parameter bar.
    Note: The source for this chart is the GL Report Line Fact table.

    Quick Ratio for the Last 12 Months Chart
    Quick Ratio for the Last 12 Months Grid
    This grid, which shows the amounts used to calculate the quick ratio, contains the following columns:
    Fin Month
    Fin Month Name
    Formula
    Currency Type
    Inventory
    Quick Ratio
    Current Assets
    Current Liabilities
    Entity Code

    Quick Ratio for the Last 12 Months Grid