💼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.

Course connection

Topic 14.7: 14.7 Analyzing Financial Statements

Unit 14