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Apr 2, 2016 |
Financial Ratios,  |
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Quick ratio

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Quick ratio measures the company's solvency with regard to short-term liabilities. Specifically, it measures whether the company's cash and equivalents and its trade and other receivables are sufficient to cover the short-term liabilities.
The main difference with the current ratio is that quick ratio does not include inventories.  

So, in this case, we don’t have the problem we have about Current ratio in order to inventory valuation that may lead to a different value of the ratio (see: Current Ratio).

 

table quick ratio