Acid Test Ratio
Same as the quick asset ratio
The acid test ratio is a measure of liquidity.
It is a strict test of the corporation's liquidity.
The formula is: current assets (without including inventory) divided by the current liabilities.
If you are looking at a company's financial statements, add up what they list for cash, cash equivalents, accounts receivables, and marketable securities and then divided the total by their current liabilities.
This is also referred to as simply the acid test or the quick ratio
