Quick Ratio

/Quick Ratio

Quick Ratio

  • Measure of short-term liquidity
  • Generally favorable: higher result
  • More conservative (errors on side of caution) compared to other liquidity measures, because it does not include inventory
  • Result of 1.2x is generally considered safe by stakeholders, particularly bankers and lenders who are concerned about loan repayments
  • Also known as the acid test ratio

Quick_Ratio

Learn accounting with the free app

Accounting Flashcards

Accounting Flashcards includes a translate button for English, Chinese, and Spanish.

Learn financial accounting using beautifully illustrated flashcards, coordinated lessons, and rich audio. Whether you are an aspiring CPA or IFRS expert, use this accountancy app to reach your goals. Even an aspiring chartered accountant or those reaching for the CPA Australia can benefit. Topics of accounting standards, equation, terms, ratios, and more are covered.

iPhone6_mockup_truacur_smaller2

Get the PDF book here

Subsribe

 

By | 2018-01-22T10:23:50+00:00 August 28th, 2015|0 Comments

About the Author:

John Gillingham is a CPA and Accounting App Developer in San Francisco, California. Check the iOS App Store for Accounting Flashcards and the Debits & Credits Game. On Android: Learn Accounting Flashcards. Also on Kindle and iBooks.

Leave A Comment

A

B

C

D

E

F

G

H

I

L

M

N

O

P

Q

R

S

T

U

V

W