Learn / Fundamentals / Financial health / Current & Quick Ratio
Current = CA÷CL · Quick = (CA−Inventory)÷CL
These ratios ask a simple question: can the company cover what it owes in the next year? The quick ratio is tougher — it assumes inventory might not sell in time.
01 Feel it first
Current assets sit against bills due soon. Click Move inventory out — the current ratio can still look fine while the quick ratio falls.
02 Break the intuition
Assets mostly stale inventory. The quick ratio exposes the trouble.
03 Explore the stack
Tap each asset slice. Toggle inventory out and watch current vs quick ratio diverge.
Ready now. Counts for both current and quick ratio.
With inventory, current ratio is 1.5×. Strip inventory and quick ratio falls to 0.5×. A healthy current ratio can hide a cash crunch underneath.
04 Sort it
Not every current asset helps in a pinch. Sort each item into what the quick ratio counts vs what it ignores.
Tap an asset, then sort by quick-ratio treatment.
Tap a card, then tap a bucket.
05 Two flavors
Same bills. Different assets on the cover side.
06 The bands
Below 1 is stress. Around 1–2 is often OK. Above 2 is comfortable — though too high can mean cash sitting idle.
07 Check yourself
08 Where it breaks
Retailers pile inventory before holidays. A year-end photo can look stressed right before the busy season starts.
A bank line of credit the company has not drawn is real backup cash — but it does not appear in these ratios. Read the footnotes.
You can cover near-term bills and still owe too much for the long haul. Liquidity is not the same as solvency.
Cash sitting in a subsidiary or a restricted account may not be available to pay the parent company’s bills.
Open any ticker for balance-sheet context — then screen for firms that can cover near-term bills.
Includes $80M inventory
Current ratio is 1.50× — looks fine. But quick ratio is 0.70×. Click to move inventory out and see why that headline number can lie.