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:

Download the Free Template

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

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 cashCash EquivalentsCash and cash equivalents are the most liquid of all assets on the balance sheet. Cash equivalents include money market securities, banker's acceptances. These assets are, namely, cash, marketable securitiesMarketable SecuritiesMarketable securities are unrestricted short-term financial instruments that are issued either for equity securities or for debt securities of a publicly listed company. The issuing company creates these instruments for the express purpose of raising funds to further finance business activities and expansion., and accounts receivableAccounts ReceivableAccounts Receivable (AR) represents the credit sales of a business, which have not yet been collected from its customers. Companies allow. 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 assetsCurrent AssetsCurrent assets are all assets that a company expects to convert to cash within one year. They are commonly used to measure the liquidity of a, 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.

• Excel Modeling TemplatesExcel & Financial Model TemplatesDownload free financial model templates - CFI's spreadsheet library includes a 3 statement financial model template, DCF model, debt schedule, depreciation schedule, capital expenditures, interest, budgets, expenses, forecasting, charts, graphs, timetables, valuation, comparable company analysis, more Excel templates
• PowerPoint Presentation Templates
• Transaction Document TemplatesTemplatesFree business templates to use in your personal or professional life. Templates include Excel, Word, and PowerPoint. These can be used for transactions,