The quick ratio is the ratio of a company’s cash or cash-like assets (highly liquid assets) with its short-term liabilities. Suppose a company has $1 million in cash on hand, plus $2 million in highly liquid cash-like assets (e.g. Treasuries). Most of their money is tied up in long-term assets, such as $500 million in real estate holdings, which (while valuable) cannot be easily converted into cash on immediate notice. But they have $100 million in short-term liabilities. Then their Quick Ratio is extremely low. If their creditors get spooked and do not want to roll over their debt, they might be forced to firesell the long-term assets at a heavy discount in order to quickly come up with the necessary money.