Acid Test Ratio
`"Acid-Test Ratio" = "Quick Assets" /( "Current Liabilities" )`
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UUID | 55bf7894-f7bf-11e4-a3bb-bc764e2038f2 |
The Acid-Test ratio equation is used to determine the relationship of quick assets to current liabilities. The Acid-test ratio indicates a company's ability to meet its current obligations. The recommended minimum ratio between quick assets and current liabilities should be 1:1.
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