Last updated October 4, 2026 · Report an error
The quick ratio — also called the acid-test ratio — is a stricter version of the current ratio that excludes inventory, since inventory isn't always quickly converted to cash when it's actually needed.
This calculator subtracts inventory from current assets, then divides by current liabilities to produce the quick ratio.
How it works
Enter current assets, inventory, and current liabilities from a balance sheet. The tool subtracts inventory from current assets to get "quick assets," then divides by current liabilities.
- Enter current assets.
- Enter inventory.
- Enter current liabilities.
- Click Calculate to see your results.
Examples
A strong quick ratio
$150,000 in current assets minus $50,000 in inventory, against $75,000 in current liabilities, gives a quick ratio of 1.33.
Who should use it
- Assessing whether a business can meet short-term obligations without relying on inventory sales.
- Comparing liquidity strength alongside the current ratio.
Industry applications
- Accounting and financial analysis
- Lending and credit assessment
Advantages
- A more conservative, stricter liquidity measure than the current ratio.
- Useful complement to the current ratio for a fuller liquidity picture.
Limitations
- May understate liquidity for businesses with fast-moving, easily-sold inventory.
Common mistakes to avoid
- Using only the current ratio for businesses with slow-moving or hard-to-value inventory, where the quick ratio gives a more realistic picture.
- Not accounting for industry norms — capital-intensive or inventory-heavy industries often run lower quick ratios as standard practice.
Best practices
- Compare quick ratio alongside current ratio to understand how much of your liquidity depends on selling inventory.
Tips
- If your quick ratio is notably lower than your current ratio, a large share of your liquidity depends on selling inventory — worth monitoring if inventory turnover slows.
Frequently asked questions
Yes, with no signup and no limit on how many calculations you run.
Inventory can take time to sell and convert to cash, and its value can be uncertain if it needs to be liquidated quickly — the quick ratio deliberately excludes it for a more conservative liquidity picture.
A ratio of 1.0 or higher is often cited as healthy, meaning quick assets alone can cover current liabilities without needing to sell inventory — though acceptable ranges vary by industry.
Use both together — the current ratio gives the fuller picture including inventory, while the quick ratio shows how the business would fare without relying on inventory sales.