Insert the information in the form and the calculator will determine the acid test ratio.

What is the acid test ratio?

The acid test ratio is a ratio that compares the firm's cash and accounts receivable to it's current liabilities. The acid test ratio indicates whether the company has enough short term assets to cover it's short term liabilities.

How to calculate acid test ratio?

To calculate acid test ratio you should use the following formula:
acid test ratio = (current assets - inventory) / current liabilities

Why use acid test ratio?

The acid test ratio is used to determine the short term liquidity of a company because it indicates whter the company has enough short term assets to cover it's short term liabilities.