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Yes they are same..
Both of them are liquidity ratios but acid test is more liquid because it excludes the inventory.
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.
Yes they are the same...I agree
sure they both are the same
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.
Quick ratio is sometimes called acid-test ratio. And it is one of the best measure of liquidity...
They are same
