Quick ratio

(Economics) ratio between the current debts of a company and its current liquid assets (measures the company's ability to fulfill its financial obligations over the short-term)

In finance the Acid-test or quick ratio measures the ability of a company to use its near cash or quick assets to immediately extinguish its current liabilities. Quick assets include those current assets that presumably can be quickly converted to cash at close to their book values. Such items are cash, marketable securities, and some accounts receivable. This ratio indicates a firm's capacity to maintain operations as usual with current cash or near cash reserves in bad periods. As such, this ratio implies a liquidation approach and does not recognize the revolving nature of current assets and liabilities. The ratio compares a company's cash and short-term investments to the financial liabilities the company is expected to incur within a year's time.
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Indicator of a company's financial strength (or weakness). Calculated by taking current assets less inventories, divided by current liabilities. This ratio provides information regarding the firm's liquidity and ability to meet its obligations. Also called the Acid Test ratio.

one of three financial ratios commonly used to evaluate a firm's liquidity; calculated by dividing current assets less stock on hand by current liabilities. See Acid-Test Ratio; Current Ratio.