How to Calculate a Quick Ratio

This is an article explaining how to calculate a quick ratio for a business.

Things You'll Need

• Financial Statements for a company
• Inventory count

Instructions

1. 

   First, a quick ratio is a financial tool that weighs assets against debt to help determine how healthy an organization is. It is also known as the "acid test".

2. 

   Now, get out your financial statement for your company.

3. Next, you should look for Current Assets, Inventory, and Current Liabilities on your statement and write these numbers down.

4. 

   Now, to calculate the Quick Ratio, you subtract Current Assets from Inventory(Current Assets - Inventory) and then divide that number by Current Liabilities.

Tips & Warnings

• Use a financial advisor when doing anything related to company finances.

• Never assume anything; always double check your work and have someone else check it as well.

Resources

• Trump University
• Better Management
• Accounting Coach