What is the Quick Ratio of a Stock?
What is the Quick Ratio of a Stock? Welcome to our short [What is the Quick Ratio of a Stock?] video 🎥 If you’re interested in investing in stocks, understanding a company’s financial health is crucial. That’s where the quick ratio comes in. In this short [What is the Quick Ratio of a Stock?] video 🎥, we’ll explain what the quick ratio is and how you can use it when investing. The quick ratio is a financial metric that measures a company’s ability to pay its short-term debts using its liquid assets. Basically, it tells us if a company has enough cash and other easily convertible assets to cover its immediate financial obligations. A quick ratio of 1 or higher is considered ideal, meaning the company can comfortably meet its short-term debts. Anything less than 1 may indicate financial troubles. The formula for the quick ratio is (Current Assets – Inventory) / Current Liabilities. We break down each component and explain how it affects the quick ratio. We also discuss the importance ...