Quick Ratio – Definition, Explanation and Proper Use

The quick ratio is a formula used in business to identify the ability of a business to pay its current liabilities. It is also known as the ‘Acid Test’ formula (ratio). In the large markets this formula is one of the industry ratios used to value the stock of a corporation. In the arena of the small business, you should only use this ratio as a means to gauge ability to pay your bills right now.

This article will define the term along with other similar terms; explain the meaning of the term; and,

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Introduction to Value Investing
Value Investing Club Membership
Principles of Value Investing

Value investing is defined as a systematic process of buying high quality stock at an undervalued market price quantified by intrinsic value and justified via financial analysis; then selling the stock in a timely manner upon market price recovery.

Value investing is by far the absolute best method to use with your portfolio. The only method that can beat value investing is 'Speculation'. And honestly, speculation is synonymous with gambling. Look at this site's Value Investment Fund results in comparison to eight major indices.

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