Legal Definitions - net quick assets

Definition: Net quick assets refer to the difference between a company's quick assets (assets that can be easily converted into cash) and its current liabilities. It is a measure of a company's ability to pay off its short-term debts using its most liquid assets.

Example: If a company has $100,000 in quick assets (such as cash, marketable securities, and accounts receivable) and $50,000 in current liabilities (such as accounts payable and short-term loans), its net quick assets would be $50,000 ($100,000 - $50,000).

Explanation: The example illustrates how net quick assets are calculated by subtracting current liabilities from quick assets. In this case, the company has enough liquid assets to cover its short-term debts with $50,000 left over. This indicates that the company is in a good financial position and has the ability to meet its obligations in the short term.