An acid-test ratio between and 1.0 is usually considered satisfactory but could also be a sign of some cash flow problems.
Question
Solution 1
The acid-test ratio, also known as the quick ratio, is a measure of a company's ability to meet its short-term obligations using its most liquid assets. It is calculated as follows:
Acid-Test Ratio = (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities
A ratio between 1.0 and Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob
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Similar Questions
An acid-test ratio between and 1.0 is usually considered satisfactory but could also be a sign of some cash flow problems.
Which of the following cash flow ratios is used to determine an entity’s solvency?Debt coverage ratio.Cash adequacy ratio.Free cash flow ratio.Cash flow ratio.
The acid-test ratio is a measure of a company's:a.Liquidityb.Profitabilityc.Solvencyd.Efficiency
At pH of 5, an acid has a dissociating constant of 1.0 X 10-4 and distribution coefficient of 100.Find the distribution ratio of this acid.
The acid-test (quick) ratio is more stringent than the current ratio because it excludes:Marketable securitiesInventoryAccounts receivableCash