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Quick Ratio = (Current Assets - Inventory) / Current LiabilitiesMeaning
The quick ratio (also known as the acid-test ratio) is similar to the quick ratio in that it's a measure of how well a company can meet its short-term financial liabilities. However, it takes the concept one step further. The quick ratio backs out inventory because it assumes that selling inventory would take several weeks or months. The quick ratio only takes into account those assets that could be used to pay short-term debts today.
Muhammad Azhar Hussain
Malik Mehmood Asghar