The acid-test ratio is a financial metric that assesses a company’s ability to cover short-term liabilities with its most liquid assets. A higher acid-test ratio suggests a stronger liquidity position ...

Balance sheets illustrate a company's financial stability via assets and liabilities. The acid-test ratio measures liquidity, with values over 1 indicating strong liquidity. High acid-test ratios ...

The Acid Test ratio is a key balance sheet liquidity ratio that helps you estimate how well a company can handle a credit crunch. The acid test ratio is a balance sheet-based financial measure ...

The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current debt. Current debt includes any liabilities coming due within a year, like accounts payable and ...

As a contrast, less stringent ratios include short-term assets like inventories -- products and materials the company could sell or plans to sell, but hasn't sold. Those are tougher to convert to cash ...

A stringent measure of a company’s ability to cover its immediate debts and obligations with its short-term assets. It is calculated by adding together cash and accounts receivable and short-term ...