The quick ratio is a financial metric used to assess a company's short-term liquidity. It measures a company's ability to meet its short-term obligations using its most liquid assets, excluding inventory. The formula for the quick ratio is: (Current Assets - Inventory) / Current Liabilities. A higher quick ratio indicates better financial health and a stronger ability to cover immediate liabilities. 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 all current assets, the quick ratio focuses on assets that can be quickly converted to cash, making it a more conservative measure of liquidity.