Acid-test ratio

Acid-test ratio is ratio of the sum of cash plus shortterm investments plus net current receivables to total current liabilities. It tells whether the entity can pay all of its current liabilities if they come due immediately; also called the quick ratio.

Definitions

According to Managerial Accounting by Braun, Tietz (5th edition),

Acid-test ratio. Ratio of the sum of cash plus shortterm investments plus net current receivables to total current liabilities. It tells whether the entity can pay all of its current liabilities if they come due immediately; also called the quick ratio.