The quick ratio is the most commonly used measure for a small firm's short-term solvency.

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The quick ratio or acid test ratio is a popular measure for evaluating a small firm's ability to pay its short-term liabilities. It is commonly used because it provides a more stringent assessment of a company's liquidity compared to other measures such as the current ratio. The quick ratio excludes inventory from current assets since inventory may not be easily converted into cash in a short period of time.

The Quick Ratio Is the Most Commonly Used Measure for a Small