What is the difference?

Quick Ratio vs Current Ratio

Quick Ratio

Current Ratio

What is it?

The Quick Ratio measures the ability of your organization to meet any short-term financial obligations with assets that can be quickly converted into cash. It considers the ability for Current Assets, less inventory, to cover Current Liabilities.

Current Ratio measures the ability of your organization to pay all of their financial obligations in the short term, which is generally one year. This ratio accounts for your current assets, such as accounts receivable, and your current liabilities, such as accounts payable, to help you understand the solvency of your business.

Formula

ƒ (Current Assets – Inventory) / (Current Liabilities)
ƒ Sum(Current Assets) / Sum(Current Liabilities)

Published and updated dates

Date created: Mar 1, 2019

Latest update: Oct 18, 2019

Date created: Feb 8, 2019

Latest update: May 18, 2021