Glossary
Glossary
Glossary
Quick Ratio (Acid Test)
Quick Ratio (Acid Test)
Definition
Measures a company's ability to meet its short-term obligations with its most liquid assets. It is calculated by dividing current assets minus inventory by current liabilities. A ratio above 1 indicates good short-term financial health.
Measures a company's ability to meet its short-term obligations with its most liquid assets. It is calculated by dividing current assets minus inventory by current liabilities. A ratio above 1 indicates good short-term financial health.
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