Define acid test ratio

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 shor...

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 be...

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 be...