Quick assets, also known as liquid assets or liquid current assets, include cash, cash equivalents, marketable securities, and accounts receivable. These assets are highly liquid and readily convertible into cash to meet short-term financial obligations or capitalize on immediate opportunities.
Examples of quick assets include:
The formula to calculate quick assets is straightforward:
Quick Assets = Cash + Cash Equivalents + Marketable Securities + Accounts Receivable
To determine quick assets:
While both current assets and quick assets represent a company's short-term resources, there are key differences between them:
Current assets include all assets expected to be converted into cash or consumed within one year, while quick assets are a subset of current assets consisting only of the most liquid assets.
Quick assets exclude certain current assets such as inventory, prepaid expenses, and other less liquid assets that may take longer to convert into cash.
Quick assets provide a more conservative measure of a company's liquidity compared to total current assets, as they exclude assets with potentially lower liquidity or marketability.
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