Analysts use the quick ratio also known as the acid test, Ask an Expert

Accounting

Analysts use the quick ratio (also known as the acid test ratio) and the current ratio. The use of both ratios has become common because

a. the acid test is a more severe test of a company's liquidity

b. the quick ratio is much easier to compute than the current ratio

c. interpretation of the current ratio is more difficult because of its complexity

d. the acid test a better measure of management's effectiveness

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M946831

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