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Action Lists > Calculating Acid-test Ratio

Calculating Acid-test Ratio

A second liquidity ratio that evaluates creditworthiness, the acid-test ratio stands as a more stringent test than the current ratio, hence its name.

What It Measures

How quickly a company’s assets can be turned into cash, which is why assessment of a company’s liquidity also is known as the quick ratio, or simply the acid ratio.


  

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