Glossary

The quick ratio, also known as an acid test ratio, is a type of liquidity ratio that measures a business’s ability to handle short-term obligations. The quick ratio uses only highly liquid current assets in its numerator, such as cash, marketable securities, and accounts receivables. The assumption is that certain current assets, like inventory, are not necessarily easy to turn into cash.

Source: https://online.hbs.edu/Documents/managers-guide-to-finance-and-accounting.pdf