The quick ratio, also known as the acid$-$test ratio, is calculated by dividing quick assets $($current assets minus inventories$)$ by current liabilities. It measures a company$$s ability to meet its short$-$term obligations without relying on the sale of inventory. A ratio above $1$ indicates sufficient liquidity to cover immediate liabilities. The quick ratio is a stringent measure of liquidity, providing a more accurate assessment of a company$$s short$-$term financial health than the current ratio. It is crucial for stakeholders to evaluate the company$$s ability to respond to financial emergencies.