Which of the following ratios is considered to be a more stringent measure of a company's ability to pay its current liabilities than the current ratio?

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The acid-test ratio, also known as the quick ratio, is considered to be a more stringent measure of a company's ability to pay its current liabilities than the current ratio. This is because it excludes current assets that may not be readily convertible to cash, such as inventory, and focuses on only the most liquid assets like cash and accounts receivable. The equity ratio and debt ratio are measures of a company's leverage and not directly related to its ability to pay current liabilities. Days' sales in receivables is a measure of how long it takes for a company to collect payment from its customers and is not directly related to its ability to pay current liabilities.

Which of the Following Ratios Is Considered to Be a More