Quick Assets

Quick Assets calculation: Cash +  Receivables + Short-term Investments.

Quick Ratio: Quick Assets divided by Current Liabilities 

Example: The Round Number Company

Cash = 10; Receivables = 20; Short-term Investments = 3

     Quick Assets =  33

Current Liabilities = 18

     Quick Ratio =  33/18 = 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.

“What do you mean by that?”

Another definition of Quick Assets is: Current Assets less Inventories.  This definition includes Prepaid Expenses but they are not always quickly converted to Cash.

 

Quick Assets Quick Assets

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