Enrollment for the FMVA™ Certification Program is now OPEN!

Quick Ratio Template

Quick Ratio Template

This quick ratio template helps you calculate the quick ratio given the amount of cash, marketable securities, accounts receivable and accounts payable.

Below is a screenshot of the quick ratio template:

Quick Ratio Template Screenshot

 

Download the Free Template

Enter your name and email in the form below and download the free template now!

Quick Ratio Template

Download the free Excel template now to advance your finance knowledge!

 

The Quick Ratio, also known as the Acid-test or liquidity ratio, measures the ability of a business to pay its short-term liabilities by having assets that are readily convertible into cash. These assets are, namely, cash, marketable securities and accounts receivable. These assets are known as “quick” assets since they can quickly be converted into cash.

 

The Quick Ratio Formula

Quick Ratio = (Cash & equivalents + marketable securities + accounts receivable) / Current liabilities

Or, alternatively,

Quick Ratio = (Current Assets – Inventory – Prepaid expenses) / Current Liabilities

 

Generally speaking, the ratio includes all current assets, except:

  • Prepaid expenses – because they can not be used to pay other liabilities
  • Inventory – because it may take too long to convert inventory to cash to cover pressing liabilities

As you can see, the ratio is clearly designed to assess companies where short-term liquidity is an important factor, and hence it is commonly referred to as the Acid Test.

 

More Free Templates

For more resources, check out our business templates library to download numerous free Excel modeling, PowerPoint presentation and Word document templates.

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)™ by completing CFI’s online financial modeling classes and training program!