Quick Assets
Candlefocus EditorQuick assets typically include items such as cash, short-term investments, marketable securities, and accounts receivable. These assets are more liquid than others, such as inventory and land, and can be converted into cash much more quickly. Fast-converting assets, like accounts receivable, can quickly become quick assets with the right systems and processes in place.
It’s important to note that a company’s quick assets can differ significantly from its current assets, as inventory and other assets that take longer to convert to cash are typically not included. This is why the quick assets ratio (the ratio of quick assets to current liabilities) is a helpful measure of a company’s liquidity and its ability to pay obligations due in the near future.
In short, quick assets are short-term assets that can be quickly and easily converted into cash – often in as little as 90 days or less. They are essential for measuring a company’s liquidity and its ability to pay its short-term obligations.