What is Quick Ratio (Acid-Test Ratio)?
The quick ratio is a stricter liquidity test than the current ratio — it excludes inventory, showing whether a company can meet obligations with its most liquid assets.
Formula
Quick Ratio = (Current Assets - Inventory) ÷ Current Liabilities
How to Interpret
Above 1 is healthy. Below 1 means the company depends on selling inventory to pay bills — risky for companies with slow-moving inventory.
Typical Ranges
Above 1.0 is healthy. Service companies naturally have higher quick ratios.
Find Stocks Using This Metric
Use the Equiscale Stock Screener to filter Indian stocks by Quick Ratio.
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