acid ratio test

acid ratio test
Method of financial analysis involving ratio of cash and receivables to current liabilities. Sum of cash, marketable securities, and receivables divided by current liabilities.
Also called the "quick ratio."

Black's law dictionary. . 1990.

Look at other dictionaries:

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  • test — 1. To prove; to try a substance; to determine the chemical nature of a substance by means of reagents. 2. A method of examination, as to determine the presence or absence of a definite disease or of some substance in any of the fluids, tissues,… …   Medical dictionary

  • Acid-Test Ratio — A stringent indicator that determines whether a firm has enough short term assets to cover its immediate liabilities without selling inventory. The acid test ratio is far more strenuous than the working capital ratio, primarily because the… …   Investment dictionary

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