The acid-test ratio is a financial metric that assesses a company’s ability to cover short-term liabilities with its most liquid assets. A higher acid-test ratio suggests a stronger liquidity position ...

The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current debt. Current debt includes any liabilities coming due within a year, like accounts payable and ...

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There’s no universal safe or danger level. Ideal current ratios vary by industry. A current ratio of 1.0 means the company has $1 in current assets for every $1 in current liabilities. A ratio below 1 ...

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