An acid-test ratio of 1.0 is considered safer than a ratio of 0.50.

Name: An acid-test ratio of 1.0 is considered safer than a ratio of 0.50.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

An acid-test ratio of 1.0 means that the company has enough liquid assets to cover its short-term liabilities. This is considered safer than a ratio of 0.50, which means the company may have difficulties meeting its short-term obligations if unexpected events occur.

An Acid-Test Ratio of 1