The quick ratio is a term used to measure the short term ability of a company to meet its obligations as they become due. This simple calculation looks at current assets that are able to be turned into cash easily versus the current liabilities.
To calculate the ratio divide the current liabilities by the current assets, less stocks and work in progress.
You are looking for a higher number, that is above 1.0 that shows the assets cover the liabilities and funds will potentially be available.
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