It is ratio between quick assets and current liabilities. This ratio is often called the “Acid-Test” ratio. It shows the better picture of the comparative ability to meet its short term liabilities out of short term assets. This includes all current assets except stock & prepaid expenses of advances. Stocks are excluded because it takes sometime for realizing into cash. Prepaid expenses should also be excluded because they can’t be converted into cash. Quick ratio ideally is calculated by dividing liquid assets with current liabilities and 1:1 is regarded as standard quick ratio.
Quick Ratio = Quick Assets Current Liabilities
Where,
Quick assets = Cash + Balance with Nepal Rastra Bank + Balance with Banks
Table No.4 Calculation of Quick Ratio
| Year | Quick Assets | Current Liabilities | Quick Ratio | |
| 2061/62 | 723,745,300 | 149,605,114 | 4.84 | |
| 2062/63 | 1,118,158,408 | 238,996,113 | 4.68 | |
| 2063/64 | 1,122,690,227 | 277,258,459 | 4.05 | |
| 2064/65 | 1,342,960,326 | 229,926,212 | 5.84 | |
| 2065/66 | 1,903,906,121 | 319,387,524 | 5.96 | |
| Average Ratio | 5.07 | |||
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