Posted inFinance & Control / Financial

Quick Ratio (Acid-Test Ratio)

Definition of this KPI:
The Quick Ratio, also known as the Acid-Test Ratio, is a financial metric that assesses a company's short-term liquidity and its ability to meet immediate financial obligations without relying on the sale of inventory. It provides insights into the company's capacity to cover its current liabilities with its most liquid assets.

  • This KPI can be calculated as: (Current Assets - Inventory) / current liabilities
  • The KPI will be measured as: number (amount of units, rating, etc)
  • How to interpret the KPI: depends on the goals
  • The strategic objective to measure with this KPI: Financial stability
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