Ratio

Quick Ratio Formula: the Guidelines for Forex Trading

4 min read

The Quick Ratio (also known as the acid test) is an important formula in Forex trading. It is used to determine a security’s liquidity and as an indicator of a company’s financial health. The Quick Ratio is calculated by dividing a company’s current assets, excluding inventory, by its total current liabilities. The higher the Quick Ratio, the more solvent a company is considered to be. It is an essential tool for forex traders as it gives them an indication of a company’s financial stability.