State about the quick ratio or acid testquick ratio , Ask an Expert

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State about the Quick ratio or acid test

Quick ratio = Current assets less inventories /Current liabilities(times)

This ratio measures immediate solvency of a business as it removes inventories out of the equation, which is item least representing cashitem, because it needs to be sold. Normal is around 1: 1 however this varies within different industries.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M9580516

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