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Define acid test ratio
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Anonymous User
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Generally, the acid test ratio should be 1:1 or higher; however, this varies widely by industry. In general, the higher the ratio, the greater the company's liquidity (i.e., the better able to meet current obligations using liquid assets)
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Anonymous User Best Answer
The acid test ratio is a useful measure of the liquidity of a business. It is calculated by adding cash, marketable securities and accounts receivable and dividing that sum by short-term liabilities.
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Anonymous User![best-answer]()
Generally, the acid test ratio should be 1:1 or higher; however, this varies widely by industry. In general, the higher the ratio, the greater the company's liquidity (i.e., the better able to meet current obligations using liquid assets)