(current assets - stocks) ÷ current liabilities. A measure of a company's ability to pay short term debt.... more on: Acid test ratio
An indication of a company's ability to meet its obligations. The ratio is calculated by dividing the total of cash, receivables and marketable securities with the total current liabilities.
also known as Liquidity Ratio and Quick Ratio. Indicates the ability of a company to meet its short term debts.
the ratio of "quick" current assets to current liabilities, used as an indicator of the business's ability to meet short-term obligations as they come due
A measure of a firm's ability to pay current debts from its most liquid, or quick, assets. Found by dividing the sum of cash, accounts receivable, and marketable securities by current liabilities.
Is another term to describe the Quick Asset Ratio. It measures an organization's liquidity by adjusting current assets by subtracting inventories and then dividing by the current liabilities.
Ratio test that is used to determine if a company can meet its short term obligations and its liquidity. It is the relationship of current assets to current liabilities.
The “acid test ratio†(also know as the “quick ratioâ€) is an accounting ratio that is concerned with business liquidity. It is defined as current assets (excluding stocks) divided by creditors falling due within one year. The acid test ratio is designed to test the short term solvency of a business, in a way similar to the current ratio. Stocks are excluded from current assets on the basis that it can often take several months to convert stocks into cash.
A more stringent test of a corporation's liquidity than current ratio. It is calculated by adding cash, cash equivalents, and accounts and notes receivable and dividing that sum by the total current liabilities. It is also known as Quick Asset Ratio.
Cash plus marketable securities divided by total current liabilities. This ratio shows the amount of cash and marketable securities per dollar of current liabilities. It is a stricter test of liquidity than the current ratio as it excludes from the numerator any assets which cannot be immediately realized to cover current liabilities. Higher values indicate that more liquid resources are available to meet current liabilities.
It is the ratio of cash, marketable securities and accounts receivable to the current liabilities. See also: Quick asset ratio.
Also called a quick ratio, an indicator of company's financial strength by dividing current assets minus inventories by current liabilities.
It is current assets less inventory and prepaid expenses divided by current liabilities.
It is the ratio indicated by dividing a company's current assets by current liabilities. It reflects the financial strength of a company and hence called Acid test ratio.
A ratio that tests a corporation's liquidity. It is a stricter test than if the current ratio is used. The ratio is calculated by dividing the sum of cash, cash equivalents, accounts receivable and notes receivable by the total current liabilities. See: Current Ratio; Quick Asset Ratio
A common investment ratio that measures a company's solvency, and is used to determine its creditworthiness. The acid test ratio is determined by a formula - liquid assets/current liabilities = company solvency. This test is not foolproof, and can give a misleading impression of how well-off a company is; a supermarket might make lots of money, yet have a low ratio as it has such a high product turnover. A ratio of less than one is a sign of real danger.
An accounting ratio, usually defined as current assets (with the exception of stocks) divided by creditors falling due within one year. It is designed to test the short term solvency of a company, in a way similar to the current ratio and its interpretation is similar to the current ratio. It is also known as the quick ratio.
A measurement of a company's liquidity i.e. its ability to meet its obligations with cash or by liquidating assets. The financial ratio is: current assets less inventories divided by current liabilities. See liquidity ratios.