What is Quick Ratio?
A definition of Quick Ratio
“The quick ratio is a financial metric that measures a company’s ability to meet its short-term liabilities with its most liquid assets, excluding inventory.”
Business Glossary > What is Quick Ratio?
Examples of Quick Ratio in a Sentence:
The quick ratio provides insight into a company’s financial health.
Our company’s quick ratio improved significantly this quarter.
A low quick ratio may suggest liquidity issues.
Why is Quick Ratio Important in Business?
The quick ratio is crucial for assessing a company’s immediate liquidity and financial stability. It helps investors and creditors understand the ability to quickly pay off liabilities without depending on inventory sales, which is critical during financial uncertainty.
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Associated Terms
Here are some associated business terms and synonyms for “Quick Ratio”:
- Acid-Test Ratio
- Liquidity Ratio
- Current Ratio
Apple Quick Ratio
Apple Inc. maintains a strong quick ratio, allowing it to cover short-term liabilities without liquidating inventory. This financial health measure assures investors of Apple’s robust financial position and capability to meet obligations promptly.
Final Notes on Quick Ratio
When analyzing a company’s quick ratio, consider comparing it against industry standards and historical performance. A consistently poor quick ratio might indicate underlying financial problems that need addressing.
This has been a definition of Quick Ratio meaning.
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