Compensation Glossary

# A B C D E F G H I J K L M N O P Q R S T U V W - Z

Acid Test

The acid test, also known as a quick ratio test, is a liquidity ratio that measures the ability of a company to pay its current liabilities when they come due with only quick assets. A quick asset is one that can be converted to cash within 90 days. Cash, cash equivalents, short-term investments or marketable securities, as well as current accounts receivable, are all considered quick assets.
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