Quick Ratio - Formula

Quick Ratio Formula:

Formula for Quick Ratio

Meaning:

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:

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.