Current position analysis helps creditors evaluate a company's ability to pay its current liabilities. This analysis is based on the following three measures:

Working Capital

Current Ratio

Quick Ratio

You completed the working capital and current ratio in Chapter 4. While these two measures can be used to weigh a company's ability to pay its current liabilities, they do not show the company's ability to pay these liabilities within a short period of time. This is because some current assets, such as inventory, cannot be converted into cash as quickly as other current assets, such as cash and accounts receivable.

The quick ratio overcomes this limitation by measuring the "instant" debt-paying ability of a company and is computed as follows:

Quick ratio = Quick assets/Current liabilities

Quick assets are cash and other current assets that can be easily converted to cash, such as temporary investments and accounts receivable. Temporary investments include securities that can be easily sold and turned into cash. The other current assets are not included as part of quick assets because they often include prepaid expenses or other deferred assets that are not easily converted to cash. If the quick ratio is less than 1 the company will have difficulties paying their current liabilities.

Compute and evaluate the quick ratio for your company's: Amazon & Google, which I have no idea where to look for these.