The acid-test ratio is also called the:
A)current ratio
B)cash ratio
C)times interest earned ratio
D)quick ratio
E)return on equity ratio

Question

Quizplus · Accepted Answer

The acid-test ratio is also known as the Quick Ratio, which measures a company's ability to pay off its current liabilities using its most liquid assets, such as cash, marketable securities, and accounts receivable. It is a more conservative measure of a company's liquidity compared to the current ratio because it excludes the inventory, which may take longer to sell and may not represent a high-quality asset in case of a financial distress situation.

The Acid-Test Ratio Is Also Called The