Acid-test ratio: Difference between revisions
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<li>[[Acid test]]</li> | |||
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==Acid test - ratio or Quick ratio== | ==Acid test - ratio or Quick ratio== | ||
The quick ratio, also called the acid test ratio, compares current assets and current liabilities similarly to the current ratio. The quick ratio removes inventory because it is typically the least liquid asset for a corporation and losses typically arise when selling such assets, which is the primary distinction between these two ratios. Short-term prepayments made by the business are also not included in this computation (Brigham, Houston 2007). | The quick ratio, also called the acid test ratio, compares current assets and current liabilities similarly to the current ratio. The quick ratio removes inventory because it is typically the least liquid asset for a corporation and losses typically arise when selling such assets, which is the primary distinction between these two ratios. Short-term prepayments made by the business are also not included in this computation (Brigham, Houston 2007). | ||
{{Acid test ration }} | {{Acid test ration }} | ||
Revision as of 18:49, 31 October 2022
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Acid test - ratio or Quick ratio
The quick ratio, also called the acid test ratio, compares current assets and current liabilities similarly to the current ratio. The quick ratio removes inventory because it is typically the least liquid asset for a corporation and losses typically arise when selling such assets, which is the primary distinction between these two ratios. Short-term prepayments made by the business are also not included in this computation (Brigham, Houston 2007). Template:Acid test ration
