Current & Quick Ratio Calculator
Three views of the same question: can the business pay what falls due in the next twelve months?
—
How it works
The current ratio compares everything due to come in within a year against everything due to go out. The quick ratio removes inventory, on the grounds that stock cannot always be sold quickly at full value. The cash ratio strips it back to cash alone — the most conservative test.
The gap between the three is informative in itself. A strong current ratio alongside a weak quick ratio means the liquidity is sitting in stock, which is exactly the position that turns awkward when a payment falls due unexpectedly.
Current = CA ÷ CL · Quick = (CA − inventory) ÷ CL · Cash = cash ÷ CL
- Current assets — cash, receivables, inventory, prepayments
- Current liabilities — payables, accruals, short-term borrowing, tax due
- Quick assets — current assets less inventory — what converts to cash quickly
Worked example
14,200,000 current assets including 4,800,000 stock and 2,100,000 cash, against 8,600,000 liabilities
Inputs
Results
A comfortable current ratio, a marginal quick ratio. A third of the apparent liquidity is stock that has to be sold first.
Frequently asked questions
What is a good current ratio?
Between 1.5 and 3.0 for most businesses. Below 1.0 means short-term liabilities exceed short-term assets, which is a genuine warning. Much above 3.0 often signals idle capital rather than strength.
Why exclude inventory from the quick ratio?
Because it may not convert to cash quickly or at book value. Stock that is seasonal, perishable or specialised can take months to shift, and often only at a discount.
Can a ratio be too high?
Yes. A current ratio of 5 usually means cash sitting idle, receivables nobody is chasing, or overstocked warehouses. All three are capital earning nothing.
Is my data sent anywhere?
No. The calculation runs entirely in your browser. Nothing you type is transmitted to us or stored.
More in Ratios & Accounting
Debt-to-Equity Ratio Calculator
How much of the business is funded by lenders rather than owners — and whether the profits comfortably cover the interest.
BusinessEBITDA Calculator
Strip out financing, tax and accounting policy to see what the operations themselves earn — and what that is worth on a multiple.
BusinessFinancial Ratio Analysis
One set of figures, the whole ratio picture — profitability, liquidity, leverage and efficiency side by side.
BusinessDepreciation Calculator
Spread an asset’s cost across its useful life, on whichever basis your accounts or tax rules require.
BusinessInventory Valuation Calculator
Three costing methods, three different profits from exactly the same transactions — see all of them at once.
BusinessEmployee Cost Calculator
What an employee really costs once contributions, benefits and overheads are added — and what contractor rate that is equivalent to.