Quick Ratio – Definition, Explanation and Proper Use
The quick ratio is a formula used in business to identify the ability of a business to pay its current liabilities. It is also known as the ‘Acid Test’ formula (ratio). In the large markets this formula is one of the industry ratios used to value the stock of a corporation. In the arena of the small business, you should only use this ratio as a means to gauge ability to pay your bills right now.
This article will define the term along with other similar terms; explain the meaning of the term; and,
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