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English definition of “acid test ratio”

acid test ratio

noun [S]
 
 
(also acid ratio, also current ratio, also liquid ratio, also liquidity ratio, also quick ratio, also quick-assets ratio) ACCOUNTING
a measure of a company's ability to pay costs and make necessary payments in the near future. It is calculated by adding together its cash and assets that can easily be changed into cash, and dividing the total by the number of debts that it has.
(Definition of acid test ratio from the Cambridge Business English Dictionary © Cambridge University Press)
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