Anonymous posted an Question
June 30, 2020 • 21:39 pm 65 points
  • UGC NET
  • Management

Define acid test ratio

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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)

  • 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)

  • 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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