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quick ratio analyzes whether a company can pay off its short-term obligations using its most liquid assets. the ideal quick ratio for companies is 1.50. quick ratio is calculated as follows:

Quick ratio = Quick assets / Current liabilities
Quick assets = Current assets - Inventory

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quick ratio analyzes whether a company can pay off its short-term obligations using its most liquid assets. the ideal quick ratio for companies is 1.50. quick ratio is calculated as follows:

Quick ratio = Quick assets / Current liabilities
Quick assets = Current assets - Inventory

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what is liquidity ratio analysis

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