The acid test ratio is a tighter measure of a company's ability to pay current liabilities than the current ratio.

Name: The acid test ratio is a tighter measure of a company's ability to pay current liabilities than the current ratio.
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The acid test ratio, also known as the quick ratio, excludes inventory from current assets in the calculation, providing a more stringent measure of a company's ability to pay its short-term debts compared to the current ratio.

The Acid Test Ratio Is a Tighter Measure of a Company's