Acid test ratio

Definition:

Also called the quick ratio, the ratio of current assets minus inventories, accruals, and prepaid items to current liabilities.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Fully depreciated

An asset that has already been charged with the maximum amount of depreciation allowed by the IRS for accounting purposes.

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