Acid test ratio – Quick ratio

The Acid Test Ratio measures a company’s ability to meet its short-term liabilities. It is calculated as current assets minus inventories and work in progress, divided by current liabilities. It is also known as the Quick Ratio. A quick ratio of 1.00 means that EUR 1 of liabilities is covered by EUR 1 of assets. A quick ratio of 0.50 is therefore less secure.

Updated 1/03/2016

The definitions in this section reflect the Belgian situation, unless otherwise stated. The texts summarise concepts in everyday language and should not be read as comprehensive or definitive. Suggestions or corrections may always be sent to glossary@tcm.be.