Alternate Formula of Quick Ratio?

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🔥NEW Alternate Formula of Quick Ratio?
caligo, Student (MBA), India, Member
Which formula is right: 1. The formulae given in the knowledge center or: 2. Quick Ratio = Current Assets -(Stock+Prepaid Expenses) / Current Liabilities. (...) Read more? Sign up for free

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  Alternate Formula of Quick Ratio
Jaap de Jonge, Editor, Netherlands
  In my opinion your formula is wrong. In the quick ratio we are interested in liquidity, so that is why we divide all assets which are quickly convertible into cash (= current assets) by the current liabilities. So current assets / current liabilities.
I don't see why you would want to subtract the stock and add prepaid expenses from/to the current assets.

  Alternative Formula of Quick Ratio
caligo, Student (MBA), India, Member
  @Jaap de Jonge: thank you sir for solving my confusion, I am very grateful for your answer.. 👍🏻.

   
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Quick Ratio
Summary
Forum
Quick Ration in Banking
Why ACID Test Ratio?
Alternate Formula of Quick Ratio?
Best Practices
🥇Quick Ratio over Time
🥈Higher Quick Ratio is not Always Good


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