An acceptable acid-test ratio varies by industry, but there is no such thing as an acid-test ratio that is too high.

Question

Quizplus · Accepted Answer

While it is true that an acceptable acid-test ratio varies by industry, having a ratio that is too high can actually indicate that a company is not using its resources efficiently. A very high acid-test ratio may suggest that a company is hoarding cash rather than investing in growth opportunities or paying off debts. Therefore, there is such a thing as an acid-test ratio that is too high.

An Acceptable Acid-Test Ratio Varies by Industry, but There Is