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Quick Ratio and Acid-Test-Ratio are one and the same thing. Do you agree ?

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تم إضافة السؤال من قبل مستخدم محذوف‎
تاريخ النشر: 2014/09/19
Sara Naeem
من قبل Sara Naeem , Trainee Finance officer , Wah Brass Mill

Yes they are same..

Khan Sohal khan
من قبل Khan Sohal khan , Associate , State Street Syntel Services Pvt Ltd.

Yes, Quick Ratio=(cash+marketable securities+receivable) /current liabilities Quick ratio signifies capacity of business concern to redeem its current liabilities with the help of available cash and cash equivalents.

Khaled Abdelrehim ACCA DipIFR CMA
من قبل Khaled Abdelrehim ACCA DipIFR CMA , Financial Analysis Assistant General Manager , Khalda Petroleum Company

Both of them are  liquidity ratios but acid test is more liquid because it excludes the inventory.

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
من قبل VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

Yes...It is one and the same as per the accepted practices.  The interpretations of many experts in the field in their writings and exemplifications followed the similar lines though at the developing stage of the  thought some minor variations prevailed and  later on accepted by others to treat them at par.  As of now also any study or research in this connection continues a widely accepted change take place, I believe for all practical purposes we need to follow the generally accepted rules as a matter of courtesy and respect to the new thinkers and developers----The purification process is going on till it reaches24 ct.

Kamran Anjum
من قبل Kamran Anjum , Head of Internal Audit , Rafhan Maize Products Company limited, Faisalabad, Pakistan, Ingredion Incorporated Gmbh

Yes they are the same...I agree

Rehan Qureshi
من قبل Rehan Qureshi , Financial Consultant , Self Employeed

sure they both are the same 

Shamel Rashad, CMA
من قبل Shamel Rashad, CMA , Finance Manager , Bavaria Alarm S.A.E.

Yes, they are basically the same.

 

(Current Assets - Inventories - Prepayments) / Current Liabilities.

 

This ratio is primarily used to show how much of an organization's current liabilities are covered by current assets, without having to quickly convert inventory into cash.

 

A very common way of tampering with this ratio to meet KPI's or bank covenants close to period end is to liquidate a portion of your inventory into cash or receivables at cost. Which increases your quick ratio without hurting your current ratio.

Dasarathi Rath
من قبل Dasarathi Rath , Sr. Accountant , Al Luban Special Investment LLC

Quick ratio is sometimes called acid-test ratio. And it is one of the best measure of liquidity...

 

 

مستخدم محذوف‎
من قبل مستخدم محذوف‎

I agree with Professor kamran

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