2 min read
Quick ratio = (current assets − inventory) ÷ current liabilities. Above 1.0 means you can meet short-term bills without selling stock.
How to use it
Enter your figures above — the result updates instantly and nothing leaves your browser. Quick ratio (acid test) calculator results are illustrative and not a quote or credit decision.
How to interpret the result
A quick ratio above one suggests your company could clear its current liabilities using cash, receivables and other assets that convert quickly, without needing to sell stock. A result below one does not automatically signal distress — it depends heavily on how fast your particular business collects debtors and how predictable its short-term outgoings are. Retailers and manufacturers with high, slow-moving inventory often sit comfortably below one as a matter of course, so context from your own sector matters more than the number in isolation.
It is most useful read alongside its close relative, the cash ratio, which strips things back further to cash alone. Comparing the two tells you how much of your quick assets are cash versus receivables still waiting to be collected — a business with a healthy quick ratio built mostly on unpaid invoices carries a different risk profile to one holding the equivalent in cash at bank.
Limitations and good practice
The quick ratio is a snapshot taken at a single point in time, drawn from a balance sheet that can look quite different a month or a quarter later. Seasonal businesses in particular should calculate it at more than one point in the year rather than relying on a single year-end figure, since a healthy reading at one moment can mask a much tighter position at another. It also treats all receivables as equally collectable, which is rarely true in practice — debtors overdue or in dispute are less reliable than the figure suggests.
Because the ratio says nothing about the timing of cash inflows against outflows, it is worth using alongside a rolling cash flow forecast rather than as a standalone health check. Businesses that also want to understand how comfortably they cover debt repayments specifically, rather than short-term liabilities generally, may find the debt service coverage ratio calculator a more targeted next step.
Frequently asked questions
Why exclude inventory?
Inventory can be slow to convert to cash, so the quick ratio is a stricter liquidity test than the current ratio.
Is this a quote?
No — it's a free illustration. Your actual Creditcorp offer depends on an assessment of your company.
Related reading
Cash ratio calculator
Whether you could pay short-term bills from cash alone.
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Read →Funding for UK limited companies
Creditcorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.