How do you determine the acid-test ratio?
A) The sum of cash and short-term investments divided by short-term debt.
B) Current assets divided by current liabilities.
C) Current assets divided by short-term debt.
D) The sum of cash, short-term investments and net receivables divided by current liabilities.

Question

Quizplus · Accepted Answer

The acid-test ratio, also known as the quick ratio, is calculated by adding cash, short-term investments, and net receivables, then dividing by current liabilities.

How Do You Determine the Acid-Test Ratio