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Using the primary quick ratio formula, we can calculate Company XYZ's acid-test ratio as follows: ($60,000 + $10,000 + $40,000) / $65,000 = 1.7. This means that for every dollar of Company XYZ's current liabilities, the firm has $1.70 of very liquid assets to cover its immediate obligations.
The acid test ratio, also known as the quick ratio or acid test, compares the short-term assets to the short-term liabilities of a company. It is an expression of the company's ability to pay the ...
The acid test ratio is one type of financial statement ratio. Test your understanding of the calculation of this specific ratio and what it indicates with this quiz and worksheet.
One test of a company's liquidity is the: a. debt ratio b. acid-test ratio c. return on stockholders' equity d. price-earnings ratio; Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2010. Also, indicate the effect of each item on Tibbetts Company that incurred during the fis
The quick ratio (also known as the acid-test ratio) offers insight into how well a company can meet its short-term obligations. As in chemistry, an acid test provides fast results, showing how quickly a company can convert short term assets to pay short term liabilities. Essentially, it’s a measure of company liquidity.
The collection of a current accounts receivable of $29,000 would ____. a. decrease the current ratio b. not affect the current ratio or the acid-test ratio c. decrease the acid-t; KPR has current assets of $10,000,000 and current liabilities of $4,500,000, inventory of $1,000,000 and sales of $12,000,000. What is the firm's acid test ratio?
Use the financial data shown below to calculate the following ratios for the current year: (a) Current ratio (b) Acid-test ratio (c) Accounts receivable turnover (d) Days' sales uncollected (e) I; A company has sales of $5,817,000, a gross profit ratio of 35%, ending merchandise inventory of $401,425, and total current assets of $6,539,600.
The collection of a current accounts receivable of $29,000 would _____. a. Increase the current ratio. b. Decrease the current ratio. c. Increase the acid-test ratio. d. Decrease the acid-test ratio. e. Increase both the current ratio and acid-test ratio; The comparative accounts payable and long-term debt balances for a company are provided below.
A company's current ratio and acid-test ratios are both greater than one. The collection of a current accounts receivable of $29,000 would ____. a. decrease the current ratio b. not affect the current ratio or the acid-test ratio c. decrease the acid-t; The ratio of cash, trade receivables, and marketable securities to current liabilities is ...
A quick ratio, (aka acid-test or acid-test ratio), is a formula used by business owners, financial institutions, investors, and other stakeholders to determine a company's ability to pay short ...