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What's the definition of Acid test ratio?

Accounting Cost Accounting Financial Accounting
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Question added by Asim Gulzar , Assistant Accountant , M/s Jeea Textiles Pvt.Ltd
Date Posted: 2014/09/09
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VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

This ratio (Acid Test Ratio) is also known as Quick Ratio, and is used to measure the short term liquidity position of the entity.

Quick ratio = Quick Assets / Current Liabilities

Quick Assets = Current assets - Unsold Stock in hand 

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