acid test ratio

Another name for the quick ratio. American Banker Glossary
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Also called the quick ratio, the ratio of current assets minus inventories ( inventory), accruals ( accrued interest), and prepaid items to current liabilities. Bloomberg Financial Dictionary
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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. Dresdner Kleinwort Wasserstein financial glossary

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acid test ratio UK US noun [S] (also acid ratio, also current ratio, also liquid ratio, also liquidity ratio, also quick ratio, also quick-assets ratio) ACCOUNTING
a measure of a company's ability to pay costs and make necessary payments in the near future. It is calculated by adding together its cash and assets that can easily be changed into cash, and dividing the total by the number of debts that it has.

Financial and business terms. 2012.

Look at other dictionaries:

  • acid test ratio — Also known as the quick ratio. An accounting ratio designed to test the short term insolvency of a company. This ratio is usually calculated as current assets (with the exception of stocks) divided by creditors falling due within one year.… …   Law dictionary

  • Acid-Test Ratio — A stringent indicator that determines whether a firm has enough short term assets to cover its immediate liabilities without selling inventory. The acid test ratio is far more strenuous than the working capital ratio, primarily because the… …   Investment dictionary

  • Acid Test Ratio — Liquiditätsgrade sind insbesondere in der Unternehmensfinanzierung und der Finanzbuchhaltung verwendete betriebswirtschaftliche Kennzahlen, mit denen die Fähigkeit eines Unternehmens, seinen Zahlungsverpflichtungen fristgerecht nachzukommen,… …   Deutsch Wikipedia

  • acid-test ratio — Fin an accounting ratio used to measure an organization’s liquidity. The most common expression of the ratio is: (Current assets – Inventory) / Current liabilities = Acid test ratio If, for example, current assets total $7,700, inventory amounts… …   The ultimate business dictionary

  • acid test ratio — / æsɪd test reɪʃɪəυ/ noun same as liquidity ratio …   Dictionary of banking and finance

  • Acid-test ratio — Also called the quick ratio, the ratio of current assets minus inventories, accruals, and prepaid items to current liabilities. The New York Times Financial Glossary …   Financial and business terms

  • acid test ratio — a ratio of cash, receivables, and marketable securities to current liabilities, used in determining credit risks. * * * …   Universalium

  • acid-test ratio — See: liquid ratio …   Accounting dictionary

  • acid-test ratio — See liquid ratio …   Big dictionary of business and management

  • acid test ratio — a ratio of cash, receivables, and marketable securities to current liabilities, used in determining credit risks …   Useful english dictionary


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