The acid-test ratio is most similar to the:

Name: The acid-test ratio is most similar to the:
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Question

Quizplus · Accepted Answer

The acid-test ratio is a more conservative measure of liquidity than the current ratio as it only takes into account the most liquid assets (cash, marketable securities, and accounts receivable) compared to both current assets and current liabilities. The current ratio includes inventory and prepaid expenses, which may not be easily convertible to cash in the short-term.

The Acid-Test Ratio Is Most Similar to The