An acid test ratio is similar to the current ratio or working capital ratio. The equation for the acid test ratio is current assets minus stocks divided by current liabilities. It can help to measure a company's liquidity from the perspective of its creditors. The ratio demonstrates whether a company would be able to repay its debts if it needed to satisfy creditors but had no time to sell any of its assets.
Latest Articles Related to Acid Test Ratio
If you find this information useful, please help us by sharing it with others.
This web site is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any securities. The author has taken all usual and reasonable precautions to determine that the information contained in this website has been obtained from sources believed to be reliable.