Glossarytaught in M2.02
Quick ratio
Also called acid test ratio, acid-test.
The current ratio with inventory removed, on the argument that stock is the current asset least likely to convert to cash quickly when it is needed.
Once its ₹780 crore of inventory comes out, a distributor at 1.77 drops to 0.99. You compute both ratios to see that gap.
A wide divergence between the two ratios says the company's short-term safety depends on selling stock. For a jeweller that's normal. For a pharmaceutical distributor with expiring product it's a different conversation.
Some versions also strip prepaid expenses. That refinement rarely changes a decision.