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Acid-test (quick) ratio

Written by the Fiveable Content Team • Last updated September 2025
Written by the Fiveable Content Team • Last updated September 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.