The acid-test ratio is a stricter test of a company's ability to pay its current debts as they are due than the current ratio is.

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The acid-test ratio only takes into account a company's most liquid assets (cash, marketable securities, and accounts receivable) compared to its current liabilities, whereas the current ratio includes all current assets. Because the acid-test ratio is a more conservative measure of liquidity, it is considered to be a stricter test of a company's ability to pay its current debts.

The Acid-Test Ratio Is a Stricter Test of a Company's