When a business has more than enough liquid assets to cover its short-term obligations, that means it has money left over to use for other purposes. How Do You Calculate a Company’s Working Capital?

The quick ratio uses only the most liquid current assets that can be converted to cash in a short period of time. The acid test, or quick ratio, involves assessing a company's balance sheet to see ...

That being said, the current ratio includes all current assets, whereas the quick ratio only includes the most liquid among them. Since assets feature in the numerator of both ratios, but the ...