Which formula represents the quick (acid test) ratio?

The quick ratio, also known as the acid-test ratio, is a financial metric that measures a company's ability to meet its short-term liabilities with its most liquid assets. This ratio excludes inventory from current assets, as inventory may not be as readily convertible to cash compared to other forms of current assets.

The formula for the quick ratio is defined precisely as the difference between current assets and inventory, divided by current liabilities. This calculation provides a more stringent view of a company's liquidity than the current ratio, as it focuses solely on assets that can quickly be converted into cash.

Using this formula allows analysts and investors to evaluate how well a company can cover its immediate obligations without relying on the sale of inventory, which may not instantly provide cash. The focus on liquid assets helps in assessing a company's short-term financial health more accurately.

Other options reflect either broader measures of liquidity or inversely related measures that do not align with the quick ratio’s specific focus on liquid assets. Thus, the option that accurately captures the essence of the quick ratio is the one that subtracts inventory from current assets and divides by current liabilities.