09/07/2026
Day 2 · Quick Ratio 🔍
Yesterday: current ratio. Today, the one it hides.
Strip inventory out of current assets and you get the quick ratio — liquidity if you couldn't sell a single item of stock. For most firms it sits close to the current ratio. For a retailer, the gap is the whole story.
DMart (Avenue Supermarts), FY25: current assets ~₹6,950 cr against current liabilities ~₹2,790 cr — a current ratio near 2.5, looks very comfortable. But cash and liquid investments are only ~₹210 cr. Almost everything else is inventory on shelves.
Strip that inventory out and the quick ratio drops to a fraction of the current ratio. On paper, alarming. In reality, DMart turns stock so fast that inventory behaves almost like cash — a low quick ratio here is the model working, not fragility.
Read the quick ratio against how fast inventory actually moves. On a slow-moving manufacturer, a low number is a warning. On DMart, it's just retail.
Tomorrow, Day 3: the strictest liquidity test of all.
