Current Ratio & Quick Ratio Calculator
Two standard liquidity ratios, answering the same underlying question from slightly different angles: can this business pay what it owes in the next year?
Current & quick ratio calculator
Two standard liquidity ratios — can the business cover its short-term obligations with what it has on hand, with and without counting inventory.
Educational illustration only. A ratio of 1.0 means exactly enough current assets to cover current liabilities — what counts as a healthy ratio varies significantly by industry.
Why quick ratio excludes inventory
Current Ratio = Current Assets ÷ Current Liabilities counts everything — cash, receivables, and inventory — as equally available to cover short-term debts. Quick Ratio = (Current Assets − Inventory) ÷ Current Liabilities removes inventory from the numerator, because inventory has to be sold (and the cash collected) before it can actually pay a bill — a step that can take weeks or months and isn’t guaranteed at the expected price.
Reading the two together
A current ratio that looks healthy but a quick ratio well below it signals a business whose liquidity depends heavily on selling inventory — worth investigating if that inventory is slow-moving or if sales assumptions behind it are realistic. Neither ratio has one universal “good” number; what counts as healthy varies significantly by industry and business model.