Enter figures from your balance sheet to see if short-term assets cover short-term obligations, with and without inventory.
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The current ratio compares all current assets with current liabilities. The quick ratio removes inventory, because stock can be slow to turn into cash. A ratio above 1 means you can cover short-term bills; much higher can mean idle cash, and below 1 is a warning sign. Healthy levels vary by industry, so compare with your own history.
Current ratio = current assets ÷ current liabilities.
Quick ratio = (current assets − inventory) ÷ current liabilities. It is a stricter test of liquidity.
On the balance sheet. Accounting software produces it on demand, so you never need to total the figures by hand.