💼intro to business review

Acid-test (quick) ratio

Written by the Fiveable Content Team • Last updated August 2025
Written by the Fiveable Content Team • Last updated August 2025

Definition

The acid-test, or quick ratio, measures a company's ability to pay its short-term liabilities with its most liquid assets, excluding inventory. It is calculated by dividing the sum of cash, marketable securities, and receivables by the current liabilities.

AP course connection

Topic 14.7: 14.7 Analyzing Financial Statements

Unit 14
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