Friday, September 23, 2016

Quick Ratio - Formula

Quick Ratio Formula:

Formula for Quick Ratio


Quick Ratio is the second important liquidity ratio that measures the organisation’s ability to meet immediate obligations on a much stringent method. Here inventories which are slower to realise or convert into cash are eliminated from the current assets.


Example-Calculation of Quick Ratio of NMDC Ltd.

Desired Number:

The minimum required number for safety is 1. Below one means inadequate safety and any number more than one indicates increased margin of safety.

No comments:

Post a Comment