Quick assets

Quick assets are any assets that can be converted into cash on short notice. These assets are a subset of the current assets classification, for they do not include inventory (which can take an excess amount of time to convert into cash). The most likely quick assets are cash, marketable securities, and accounts receivable. However, quick assets are not considered to include non-trade receivables, such as employee loans, since it may be difficult to convert them into cash within a reasonable period of time.

A financially healthy business that does not pay dividends may have a large proportion of quick assets on its balance sheet, probably in the form of marketable securities and/or cash. Conversely, a business in difficult circumstances may have no cash or marketable securities at all, instead fulfilling its cash requirements from a line of credit. In the latter case, the only quick asset on the books may be trade receivables.

The total of all quick assets is used in the quick ratio, where quick assets are divided by current liabilities. The intent of this measurement is to determine the proportion of liquid assets available to pay immediate liabilities.

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