The acid-test ratio is a more stringent test of a company's ability to pay its short-term debt compared to the current ratio.

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The acid-test ratio, also called the quick ratio, excludes inventory from current assets and only considers cash, marketable securities, and accounts receivable in determining a company's ability to pay off its short-term debt. This makes it a more stringent test than the current ratio, which considers inventory in addition to these assets.

The Acid-Test Ratio Is a More Stringent Test of a Company's