Acid test ratio

Acid test ratio (or quick ratio)
The acid test ratio (or quick ratio) is a measurement of a company's ability to pay short term liabilities without selling inventory.

Acid Test Ratio
is a test if a company can cover its short term liabilities with its short term assets
without liquidating any of its inventory.
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Acid Test Ratio
Also known as quick asset ratio or liquidity ratio, it is a measurement of corporate liquidity and is obtained as the value of cash equivalents and accounts receivable divided by current liabilities.
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Acid test ratio
Definition:
Also called the quick ratio, the Ratio of Current assets minus inventories, accruals, and prepaid items to current liabilities. ...

Acid Test Ratio
is a ratio that takes the current assets less inventories to total current liabilities. (acid test ratio = current assets less inventories / current liabilities).

Acid Test Ratio
The Acid Test Ratio is the ratio of a company's current assets subtracted from its inventories, accruals and prepaid items to current liabilities.

Acid Test Ratio - Another name for the quick ratio (see "Quick Ratio").
Accounts Payable - Obligations owed by a company that are due within one year. These obligations are shown as a current liability on the balance sheet.

Acid test ratio
It is the ratio indicated by dividing a company's current assets to current liabilities. It reflects the financial strength of a company and hence called Acid test ratio. Also known as quick ratio.
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Acid test ratio: See Quick Ratio.
ACRS: See Accelerated Cost Recovery System.

The acid test ratio represents an in-depth accounting of a company to adequately manage the outstanding liabilities currently held by the corporation.

Usually an acid test ratio of 1.0 or higher is considered satisfactory by lenders and investors. Also referred to as the Quick Ratio.
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Generally, the acid test ratio should be 1:1 or higher, however this varies widely by industry. [1] In general, the higher the ratio, the greater the company's liquidity (i.e., the better able to meet current obligations using liquid assets).[2] ...

Cash Current Debt Coverage Ratio
The Cash Current Debt coverage ratio measures a companys ability to repay their current debt. Unlike the current and acid test ratio which looks at the year end balamce of assets this ratio looks at ...

Quick Ratio: cash and cash equivalents plus accounts receivables divided by current liabilities (aka Acid Test Ratio) ...

See also: Test, Ratio, Asset, Liabilities, Current Liabilities