Discover how the acid-test ratio measures a company's ability to cover short-term liabilities with its most liquid assets, ...

The worst news investors can get is that a company whose stock they own has gone bankrupt. As cataclysmic as bankruptcy can be, there are usually warning signs that astute investors can look for ...

Source: LendingMemo.com via Flickr. The acid test ratio is a balance sheet-based financial measure designed to help you judge how well a company can cover its short-term obligations. It is considered ...

The acid-test ratio is a financial metric that assesses a company’s ability to cover short-term liabilities with its most liquid assets. A higher acid-test ratio suggests a stronger liquidity position ...

The ability of a company to convert short-term assets into cash is one of the primary concerns of financial managers because liquidity problems can have a big impact on operational efficiency and ...

A stringent measure of a company’s ability to cover its immediate debts and obligations with its short-term assets. It is calculated by adding together cash and accounts receivable and short-term ...

The acid test ratio is a balance sheet-based financial measure designed to help you judge how well a company can cover its short-term obligations. It is considered a stringent measure of the company's ...

As a contrast, less stringent ratios include short-term assets like inventories -- products and materials the company could sell or plans to sell, but hasn't sold. Those are tougher to convert to cash ...