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In finance, the quick ratio, also known as the acid-test ratio is a type of liquidity ratio, which measures the ability of a company to use its near-cash or 'quick' assets to extinguish or retire its current liabilities immediately. It is defined as the ratio between quickly available or liquid assets and current liabilities.
Financial analysts also employ the "acid test" nickname for the quick ratio method, which assesses the liquidity of a business. The term "acid test" took on a different meaning in the realm of experiences with the psychedelic drug LSD, popularized by the Merry Pranksters. This association stems from the drug's colloquial name, "acid" (which ...
A more conservative measure of liquidity is the quick ratio — also known as the acid-test ratio — which compares cash and cash equivalents only, to current liabilities. In contrast, the ...
The quick ratio, or acid-test, measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately. Quick assets are those that can be quickly turned into cash if necessary. It would not be used for substantial period of time such as, normally, twelve months.
A quick ratio tests a company’s current liquidity and solvency. It is a measure of whether the company can pay its short-term obligations with its cash or cash-like assets on hand. (Short term ...
The acid number is a measure of the number of carboxylic acid groups ( −C (=O)OH) in a chemical compound, such as a fatty acid, or in a mixture of compounds. [ 2] In other words, it is a measure of free fatty acids (FFAs) present in a substance. In a typical procedure, a known amount of sample dissolved in an organic solvent (often ...
A financial ratio or accounting ratio states the relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers ...
Universal indicator. A universal indicator is a pH indicator made of a solution of several compounds that exhibit various smooth colour changes over a wide range pH values to indicate the acidity or alkalinity of solutions. A universal indicator can be in paper form or present in a form of a solution. [1]