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May 21, 2024 · The acid-test, or quick ratio, shows if a company has, or can get, enough cash to pay its immediate liabilities, such as short-term debt. For most industries, the acid-test ratio should exceed...
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.
Apr 21, 2022 · Learn how to calculate and interpret the acid test ratio, a measure of liquidity that compares a company's most liquid assets with its current liabilities. Find out the benefits, drawbacks, and ways to improve this ratio for your business.
Jan 9, 2024 · The Acid Test Ratio, or “quick ratio”, is used to determine if the value of a company’s short-term assets is enough to cover its short-term liabilities. Compared to the current ratio, the acid test ratio is a stricter liquidity measure due to excluding inventory from the calculation of current assets. Table of Contents.
May 21, 2024 · The acid-test ratio (ATR) measures how well a company can cover its current liabilities with its most liquid assets. Learn how to calculate ATR, interpret the results, and compare it with other ratios.
May 7, 2024 · Learn how to measure a company's short-term liquidity using the acid test ratio, which excludes inventory from the calculation. See examples of acid test ratio for ABC Ltd. and Apple Inc., and compare it with the current ratio.
Mar 29, 2023 · Acid-test ratio, also known as quick ratio, measures a firm's ability to meet short-term liabilities by liquidating its assets. Learn how to calculate it, why it is important, and how it varies across industries and business conditions.
