Quick Ratio (Acid Test)
A stricter liquidity test that excludes inventory from current assets.
Quick Ratio = (Current Assets − Inventory) ÷ Current Liabilities
Quick Quick Ratio (Acid Test) calculator
₹Cr
₹Cr
₹Cr
Quick Ratio (Acid Test)
1.22x
Quick Ratio = (Current Assets − Inventory) ÷ Current Liabilities
What is the Quick Ratio (Acid Test)?
The quick ratio (or acid-test) measures a company’s ability to meet short-term obligations using only its most liquid assets — cash, receivables and marketable securities, excluding inventory that may be hard to sell quickly.
How to interpret it
A quick ratio above 1 means the company can cover current liabilities without relying on selling inventory. It is a more conservative liquidity gauge than the current ratio.
What’s a good Quick Ratio (Acid Test)?
> 1
Comfortable
0.7–1
Borderline
< 0.7
Weak
Around 1 or above is comfortable. Below 1 means the company depends on selling inventory to meet obligations.
Common mistakes
- Forgetting to subtract inventory — that just reproduces the current ratio.
- Applying it to businesses (like retail) where fast inventory turnover is normal.
See it on a real stock
This ratio computed for any listed company.
Related ratios
All financial ratios →For educational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.