The Quick Ratio is a financial metric used to assess a company's short-term liquidity. It measures a company's ability to cover its current liabilities with its most liquid assets, excluding inventory. The formula for calculating the Quick Ratio is: (Current Assets - Inventory) / Current Liabilities. A higher Quick Ratio indicates better financial health and a stronger ability to meet obligations. This ratio is particularly useful for investors and creditors as it provides insight into a company's operational efficiency. Unlike the Current Ratio, which includes inventory, the Quick Ratio focuses on assets that can be quickly converted to cash, making it a more conservative measure of liquidity.