Certified Fraud Examiner Practice Exam 2026 – All-in-One Guide to Master Your Certification!

The Quick Ratio, also known as the acid-test ratio, is a financial metric used to assess a company's ability to meet its short-term obligations with its most liquid assets. This ratio specifically includes cash, marketable securities, and accounts receivable in its calculation, as these asset types can be quickly converted to cash to cover liabilities.

Cash provides immediate liquidity, marketable securities can be quickly sold for cash, and receivables represent money owed by customers that is expected to be collected relatively soon. This focus on short-term assets distinguishes the Quick Ratio from other liquidity ratios that may include less liquid assets.

In contrast, other options reference asset types that do not belong in this calculation. Property and equipment are long-term assets that are not easily liquidated. Inventory is excluded because it may not be converted to cash quickly and is often considered less liquid than the other assets mentioned. Long-term investments and bonds are also not included, as they do not typically represent near-term liquidity that can be readily used to cover obligations.