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What does a current ration and acid test ratio show about a business?

April 26, 2017acid Business Finance ratio ration Test

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What does a current ration and acid test ratio show about a business?

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both of them are variations of the ratio of between current assets and current liabilities. the acid test only looks at liquid assets that are current, ie cash, cash on short term deposit and not stock. Stock can be hard to liquidate quickly so it is not used in the acid test.