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What is the difference between the current ratio and the quick ratio?

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Question ajoutée par Ahmed Abd El-Hafez Kdwany-DipIFR , Chief Accountant (KSA -Remotly ) , IKEA| KSA & Bahrain
Date de publication: 2015/03/16
Ahmed kandil
par Ahmed kandil , Cost Controller , Battour Holding Cpompany

Current Ratio=current assets÷ current liabilitiesquick Ratio = ( current assets - inventory )÷ current liabilities ...both of two ratios are liquidity ratios which measure degree of short term liquidity

Aphrodite Allan Regalado
par Aphrodite Allan Regalado , Operations Coordinator , deugro Qatar, LLC.

Current ratio is based on the total current liabilities, whereas, quick ratio is based on most liquid current assets eliminating inventories as we all know that it will take some time to turn this into cash or other liquid assets.

Khaliq Raza MBA   MS   CFE  AFA
par Khaliq Raza MBA MS CFE AFA , Finance Manager , Vertex Trading

Both are used for measuring short term liabilities. Hence they have difference in Numenator but both have the same Denominator. Both divided by Current Liabilities.But in case of Quick Ratio we minus Stock from Current Assests. Thanks

khurram ali
par khurram ali , Accounts officer , Al Haddad Trading & Cont Co

current ratio is equal to current assets divded by current ratios 

in quick ratio current assets minus inventories divide by current liabilities.

These are used to find out the short term liquidity

ahmad alarfaj
par ahmad alarfaj , Store Accountant , Tamimi

Current and Quick are both used in meauring liqudity of assets the difference is that in the quick we deduct the least liquid of them which is inventory

Mohamed Ghazi CMA
par Mohamed Ghazi CMA , Finance and Budget Manager , Ernst & Young

Inventory is not included in the numerator of the quick ratio, because the company will need to replace sold inventory, But included when calclated the current ratio

The quick ratio, also called the acid test ratio, is a more conservative version of the current ratio. The quick ratio measures the firm’s ability to pay its short-term debts using its most liquid assets.

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