The acid-test ratio measures current assets versus current liabilities, but with a different approach. The current assets that are measured are only those that are considered truly liquid, meaning they can be turned into cash very quickly.

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The acid-test ratio, also known as the quick ratio, specifically measures a company's ability to pay its current liabilities without relying on the sale of inventory, by considering only the most liquid assets (cash, marketable securities, and accounts receivable).

The Acid-Test Ratio Measures Current Assets Versus Current Liabilities, but with a Different