Quick Assets
Content
Definition
Quick Assets are assets that can be quickly converted into cash without losing value, including cash, marketable securities, and receivables, used in calculating liquidity ratios.
Usage and Context
Quick assets are those that can easily be turned into cash, keeping the company liquid.
Frequently asked questions
- Can quick assets be converted into cash? Yes, quick assets like cash, marketable securities, and receivables are easily convertible to cash.
- What is the formula for quick assets? Quick assets = Current assets minus inventory.
- What does it mean when we say an asset can be converted easily into cash? It means the asset is very liquid and can be quickly sold or exchanged for cash.
Benefits
Quick assets can be easily converted to cash, helping businesses maintain liquidity.
Conclusion
Quick assets keep a company financially flexible by being easily converted into cash.
