This illustrated glossary uses Visual Finance™ to provide a contextualized 'big picture' view of financial results. The examples feature data for the Round Number Company—a 'made-up company' with simplified figures. The Appendix presents an explanation of how to read Visual Finance as well as the financial statements and VF views for the Round Number Company.
Quick Assets calculation: Cash plus Receivables plus Short-term Investments.
Quick Ratio: Quick Assets divided by Current Liabilities
Example: The Round Number CompanyCash = 20; Receivables = 40; Short-term Investments = 6, Current Liabilities = 36 Quick Assets = 20 + 40 + 6 = 66 Quick Ratio = 66/36 = 1.8 |
Quick Assets include the Current Assets that can quickly (and easily) be converted to cash.
The Quick Ratio is a variant of the Current Ratio; it only includes items which are quickly (and easily) converted into cash.
Another definition of Quick Assets is: Current Assets less Inventories. This definition includes Prepaid Expenses but they are not always quickly converted to Cash.
The above is our generic explanations of common corporate financial terminology. Actual meanings can vary widely from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"
term list.