Definition: What is Quick Ratio (Acid Test)?
The Quick Ratio also called the Acid Test Ratio. It is used to measure the ability of the company to pay its current liabilities when they come due with only its quick assets.
Quick assets are short term assets or current asset which convert into cash in a short time such or in 90 days.
Quick ratio often called the acid test which shows the finance test of the company that how well the company quickly convert its assets into cash for the payment of current liabilities of the company.
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