Quick Assets


DEFINITION of 'Quick Assets'

Anything having commercial or exchange value that can easily be converted into cash, or that is already in cash form. Quick assets are the highly liquid assets held by a company, including cash, marketable securities and accounts receivable. Quick assets are often calculated as current assets (cash + marketable securities + accounts receivable) minus inventories (since inventories are often a firm's least-liquid current assets). Quick assets are used by companies to calculate certain financial ratios that are used in decision making, including the quick ratio.

BREAKING DOWN 'Quick Assets'

The quick ratio (sometimes called the quick asset ratio or "acid test") is a financial ratio that divides a company's cash + marketable securities + accounts receivable by its current liabilities.

By keeping inventories out of the equation, the quick ratio allows the company to focus on its quick assets – those that could be quickly converted to cash – and helps the company determine if it could meet its financial obligations if sales (and revenues) were to cease.

The current ratio, on the other hand, is equal to current assets (including inventories and any assets that could be converted into cash within a "normal" 12-month operating period) divided by current liabilities.

  1. Current Assets

    A balance sheet account that represents the value of all assets ...
  2. Current Ratio

    The current ratio is a liquidity ratio measuring a company's ...
  3. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. ...
  4. Spontaneous Assets

    The assets of a company that are accumulated automatically as ...
  5. Goodwill To Assets Ratio

    A ratio that measures how much goodwill a company is recording ...
  6. Inventory

    The raw materials, work-in-process goods and completely finished ...
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  2. Does working capital include stock?

    A certain portion of a company’s working capital is generally composed of earnings; however, current short-term assets that ... Read Full Answer >>
  3. Does working capital measure liquidity?

    Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>
  4. Can working capital be negative?

    Working capital can be negative if a company's current assets are less than its current liabilities. Working capital is calculated ... Read Full Answer >>
  5. How do I read and analyze an income statement?

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