Definition of quick assets
: cash, accounts receivable, and other current assets excluding inventories
First Known Use of quick assets
Financial Definition of QUICK ASSETS
What It Is
How It Works
For example, let's say that Company XYZ has $60,000 in cash, $40,000 in receivables, and $10,000 in marketable securities. We would say that Company XYZ has $110,000 in quick assets.
Why It Matters
Quick assets are a key part of the quick ratio, which is a measure of whether and how well a company can pay its short-term financial liabilities. The ratio is often called the acid-test ratio. The primary formula for quick ratio is:
(Cash + Marketable Securities + Accounts Receivable)/Current Liabilities
For example, here is some information about XYZ Company:
Using the primary quick ratio formula and the information above, we can calculate that XYZ Company’s quick ratio is:
($60,000 + $10,000 + $40,000)/$65,000 = 1.692
This means that for every dollar of XYZ Company’s current liabilities, XYZ Company had $1.69 of very liquid assets to pay those liabilities.
A common rule of thumb is that a quick ratio of 1-to-1 or greater means a company can pay its current liabilities.
see asset 2
Learn More about quick assets
Britannica English: Translation of quick assets for Arabic speakers
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