Is Your Business Actually Safe? | The Quick Ratio Explained
5 Mar 2026 · 0 min
0:13
In this brief financial explainer, Paul Freudenberg emphasizes that while profit can be misleading, cash reflects a business’s true health. He introduces the quick ratio as a simple metric to assess liquidity safety: add cash on hand to unpaid invoices (accounts receivable) and divide that sum by total obligations due within the next 12 months. He states that a quick ratio below 1 indicates the business is exposed to cash shortfalls, urging viewers to calculate their own ratio to gauge financial safety.
