What is the acid test ratio?
The acid-test ratio is a strong indicator of whether a firm has sufficient short-term assets to cover its immediate liabilities.
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Updated 2/28/2016 9:54:37 AM
Edited by yumdrea [2/28/2016 9:54:29 AM]
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The acid-test ratio is a strong indicator of whether a firm has sufficient short-term assets to cover its immediate liabilities.

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The Acid-Test Ratio, also known as the quick ratio, is a liquidity ratio that measures how sufficient a company’s short-term assets are to cover its current liabilities. In other words, the acid-test ratio is a measure of how well a company can satisfy its short-term (current) financial obligations. This guide will break down how to calculate the ratio step by step, and discuss its implications.

Added 233 days ago|10/20/2022 12:11:27 AM

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