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The quick ratio measures a firm’s ability to service current obligations by the most liquid assets, which is then used to evaluate creditworthiness.

Desired Comparison to Industry Average
Generally, greater than or equal to the industry average.

If Quick Ratio is Above Industry Average
Although typically positive, this may indicate an excess of cash or under-investment in inventory. The effect of either of these could show up in reduced sales and reduced profits.

If Quick Ratio is Below Industry Average
Could create a shortage of cash, and usually stems from over-investment in inventory. Generally, any value less than a 1 to 1 implies a dependency on inventory or other current assets to liquidate short-term debt. Low cash can cause loss of discounts on payables, and may cause higher levels of borrowing.