How well can current assets cover current liabilities? Reviewed by Amy Drury The acid-test ratio (ATR), also commonly known as the quick ratio, measures the liquidity of a company by calculating ...

The acid-test ratio, also known as the quick ratio, is a liquidity ratio that is calculated by dividing a company’s most liquid assets by its current liabilities. The formula is: Acid-Test Ratio ...

An “acid test” is a slang term for a quick test designed to produce instant results. The quick ratio measures a company’s capacity to pay its current liabilities without needing to sell its ...

Also called acid test ratio or quick ratio, it is a corporations current assets minus inventories divided by current liabilities. By excluding inventory from the formula, the ratio focuses on a ...

It's also called the acid test ratio, or the quick liquidity ... marketable securities, and current accounts receivable. A quick ratio of 1 is considered the industry average.

The current ratio measures a company's ability ... It is also known as the acid-test ratio. Days sales outstanding (DSO) refers to the average number of days it takes a company to collect payment ...

Hence, a range of 1-3 is considered ideal. Quick Ratio: Unlike the current ratio, the quick ratio — the “acid-test ratio” or “quick assets ratio” — indicates a company’s ability to ...