This ratio expresses in percentage terms the ability of the company to satisfy its short term liabilities (current liabilities) without using prepaid expences and resources lying in the stocks (inventories).

The value of quick-ratio results from the following formula: 

 

TOTAL LIQUIDITY / CURRENT LIABILITIES 

 

It is used as liquidity test "acid-test" since the inventories are excluded from the total current assets used in this ratio. It is important to evidence that only quick-assets (liquid assets) can be used in the ratio divided by the current liabilities (thos due in one year or less). 

 

 

Studio Lupini srl
Via Don Rosmini, 4
21052 Busto Arsizio (VA) IT
MAIL: info@studiolupini.it
VAT:  IT 03611190129
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