Liquidity – Quick Ratio

Quick Ratio (Receivables + Cash divided by Short-term Liabilities) is a liquidity measurement that answers the question; "Can the company pay its bills? 

The ratio compares cash and receivables with Short-term Liabilities. If the ratio is above 100 % the ratio is considered good and if it's below 100 % it might be insufficient.  Depending on the industry sector Quick Ratio requirement can differ.

Below, see how Quick Ratio is impacted.  Efficient processes in Receivables and Payables are critical to achieving and maintaining a healthy Quick Ratio.