acid test ratio Meaning in the Cambridge English Dictionary Cambridge dictionaries logo

Meaning of “acid test ratio” in the English Dictionary

"acid test ratio" in Business English

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acid test rationoun [S]

uk   us   (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 ​paycosts 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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