Quick assets, also known as liquid assets or current liquid assets, refer to a company’s most readily convertible and easily marketable assets into cash within a short period, typically within one year or less.
They are a subset of current assets.
The main components of quick assets typically include:
Quick assets are essential in assessing a company’s liquidity and ability to meet its short-term obligations. ​
Company XYZ’s balance sheet shows the following assets:
To calculate the quick assets, we exclude inventory and prepaid expenses since they are not easily convertible into cash:
Quick assets = R50,000 + R30,000 + R20,000 = R100,000
In this example, Company XYZ’s quick assets total R100,000, which represents the amount of assets that can be quickly converted into cash to meet short-term obligations or unexpected expenses.