For most industries, the acid-test ratio should exceed 1.0. On the other hand, a high ratio is not always good. It could indicate that cash has accumulated ... What Is the Acid-Test Ratio? · Calculation · Example

Ideally, a business should have an acid-test ratio of at least 1:1. A company with less than a 1:1 acid-test ratio will want to create more quick assets.

Ideally, companies should have a ratio of 1.0 or greater, meaning the firm has enough liquid assets to cover all short-term debt obligations or bills. The acid- ... Information Needed for the Ratio · Interpretation · Example

The higher the ratio, the better the company's liquidity and overall financial health. A ratio of 2 implies that the company owns $2 of liquid assets to ...

The general rule of thumb for interpreting the acid-test ratio is that the higher the ratio, the less risk attributable to the company (and vice versa).

13 июн. 2024 г. · An acid ratio test, also known as a quick ratio, measures the ability of a company to use their short-term assets to cover their immediate liabilities.

An acid-test ratio of 1.0 means that a company has enough liquid assets to cover its current liabilities.

10 окт. 2023 г. · 1. Acid-Test Ratio = 1 or Higher: If the ratio is equal to or greater than 1, the company has sufficient liquid assets to cover its short-term ...

What is a good quick ratio? A good quick ratio is above 1. If the ratio is below 1, a company might have trouble paying its current liabilities. However, there ...