Quick Ratio or Acid-test Ratio measures a company's ability to pay off all short-term liabilities immediately with its most liquid assets.
$$Quick\; Ratio \mmlToken{mo}[linebreak="auto"]{=} \frac{Cash+Cash Equivalents+Accounts\; Receivable}{Current\; Liabilities}$$
To meet all obligations simultaneously, a company's quick ratio should be 1 or higher. It's important to note that the ratio includes accounts receivable. For example, if a company has a significant amount of long-term accounts receivable and short-term liabilities come due, the quick ratio may not indicate a problem, even though the company may run out of cash. Conversely, if customers pay quickly but suppliers have longer payment terms, a low ratio may not necessarily indicate liquidity problems.