Quick Ratio
Content
Definition
The Quick Ratio, also known as the acid-test ratio, is a measure of a company`s ability to meet its short-term obligations with its most liquid assets, providing insight into its financial health.
Usage and Context
The quick ratio shows how well a company can pay its short-term debts with its liquid assets.
Frequently asked questions
- What is quick ratio also known as acid test ratio? The quick ratio, or acid test ratio, shows if a company can pay short-term liabilities using its most liquid assets.
- What does the quick ratio measure? The quick ratio shows if a company can pay its short-term debts with its most liquid assets.
- What does the quick ratio or acid test ratio indicate? The quick ratio indicates a company`s ability to pay its short-term debts using its most liquid assets.
Benefits
The quick ratio measures a company`s ability to meet short-term obligations using liquid assets.
Conclusion
The quick ratio measures how well a company can cover short-term debts using its most liquid assets.
