Asked by
Brianne Wagner
on Dec 17, 2024
Verified
The acid test ratio is the best test to determine the ability to pay short-term debt.
Acid Test Ratio
A financial metric that measures a company's ability to pay off its short-term liabilities with its quick assets.
Short-Term Debt
Borrowings and financial obligations that are due for repayment within one year.
- Master the skill of calculating and recognizing the relevance of liquidity ratios, including current and quick ratios.
- Identify the essentiality of upholding satisfactory liquidity and asset management for the efficiency of operations.
Verified Answer
CS
Learning Objectives
- Master the skill of calculating and recognizing the relevance of liquidity ratios, including current and quick ratios.
- Identify the essentiality of upholding satisfactory liquidity and asset management for the efficiency of operations.