A quick ratio of less than one generally is considered to be a negative factor when analyzing a government's General Fund.

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From the perspective of the financial statement analyst, the higher the quick ratio, the greater is the entity's ability to meet its current obligations. A quick ratio of 1.0 (or 100 percent) says that enough cash is on hand to pay currently due bills, but a somewhat higher ratio is generally desirable to provide a reasonable margin of safety. The International City/County Management Association considers a quick ratio of less than 1 to be a negative factor. Under New York State's Fiscal Stress Monitoring System, negative points are assigned to the rating scheme unless this indicator is greater than 100 percent.

A Quick Ratio of Less Than One Generally Is Considered