03B. Liquidity KPIs: Quick Ratios

Episode 3 is split into four parts; each segment will be discussing a different Liquidity KPI. You'll learn about how that metric impacts your client’s business and what it can do for your advisory services. The Quick Ratio is a way of measuring a company’s liquidity and its ability to meet obligations. The basic calculation is: (Current Assets - Inventories) / Current Liabilities. Since this KPI takes inventories into account, is more valuable for companies that manage inventory; like a hardware store, grocery store, or clothing store. So Quick Ratios will be valuable for specific type of business, and are a good indicator of the immediate strength of that company.