Also called the quick ratio, it's equal to the sum of cash, short-term investments and net current receivables divided by current liabilities. It's a measure of whether or not the business could pay all its current liabilities if they came due immediately.

The ratio is used to measure a company’s liquidity and evaluate credit worthiness. Is found by taking current assets minus inventories, accruals, and prepaid items to liabilities.

A measure of a corporation's liquidity, calculated by adding cash, cash equivalents, and accounts and notes receivable, and dividing the result by total current liabilities. It is a more stringent test of liquidity than current ratio.

A measure of a firm's ability to meet current liabilities; more restrictive than the current ratio, it is computed by dividing net quick assets (all current assets, except inventories and prepaid expenses) by current liabilities.

method of judging a firm's ability to meet current debt quickly. The formula: total cash + receivables = current liabilities. One common standard ratio is one to one (1:1).

Measure of a company's liquidity that excludes inventories.

See Summary of financial ratios.