Definition

Acid-test (quick) ratio

Acid-test (quick) ratio is a measure of a company’s immediate short-term liquidity; computed by dividing the sum of cash, short-term investments, and net receivables by current liabilities. Thus, it is an important complement to the current ratio.

Share it:  Cite

More from this Section

  • Investment center
    Investment center is a responsibility center that incurs costs (and expenses), generates ...
  • Proprietorship
    A business owned by one person is generally a proprietorship. The owner is often the manager/operator ...
  • Master Limited Partnership (MLP)
    Master Limited Partnership (MLP) is a partnership that sells units traded on a recognized ...
  • Compensating balances
    Compensating balances refer to the minimum cash balances required by a bank in support ...
  • Research & development costs
    Research and development costs are expenditures that may lead to patents, copyrights, ...