<P> or specifically: </P> <P> Quick (Acid Test) Ratio = Cash and Cash Equivalent + Marketable Securities + Accounts Receivable Current Liabilities (\ displaystyle (\ mbox (Quick (Acid Test) Ratio)) = ((\ mbox (Cash and Cash Equivalent)) + (\ mbox (Marketable Securities)) + (\ mbox (Accounts Receivable)) \ over (\ mbox (Current Liabilities)))) </P> <P> Note that inventory is excluded from the sum of assets in the quick ratio, but included in the current ratio . Ratios are tests of viability for business entities but do not give a complete picture of the business' health . If a business has large amounts in accounts receivable which are due for payment after a long period (say 120 days), and essential business expenses and accounts payable due for immediate payment, the quick ratio may look healthy when the business is actually about to run out of cash . In contrast, if the business has negotiated fast payment or cash from customers, and long terms from suppliers, it may have a very low quick ratio and yet be very healthy . </P> <P> More detailed analysis of all major payables and receivables in line with market sentiments and adjusting input data accordingly shall give more sensible outcomes which shall give actionable insights . </P>

Do you want quick ratio to be high or low
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