Why The Quick Ratio?

The Quick Ratio is a metric that is simple to understand while it can provide very useful information about the financial health, or liquidity of the business. I attended a seminar a few years back in which I heard from a Wall St. Money Manager with over $125MM under management on how he evaluates his companies.

He doesn’t “buy on the hype.” He buys on the fundamentals and he uses a great deal of ratio analysis. When I was listening to him I was finding myself thinking about how this could actually work for my clients. I took his handout home and got to work.

More recently I was developing a set of weekly reports for one of my clients, he asked me to think in terms of “what else” he might want to see. I introduced the Quick Ratio because it was easy to explain and it told us a lot, especially when we look at it week to week on a comparative basis.

Section 2 of Bookkeepers Delight is out and it teaches how you can add this to the set of weekly reports we are developing in this course. This is part of my continuing effort to help develop a set of practical tools that people can put into action at once to blow their clients, their boss, or themselves away with what they can do.

I hope you enjoy it and please post your comments and questions so I can learn more about what you would like to learn.

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