Final answer:
The quick ratio formula uses cash as one of its components. The quick ratio is a measure of a company's ability to meet its short-term liabilities with its most liquid assets.
Step-by-step explanation:
The quick ratio formula uses Cash as one of its components. The quick ratio, also known as the acid-test ratio, is a measure of a company's ability to meet its short-term liabilities with its most liquid assets. It excludes inventory because inventory can be more difficult to quickly convert into cash. By focusing on cash and other highly liquid assets, the quick ratio provides a more conservative assessment of a company's liquidity.