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Recall the formula for calculating a company's acid - test ratio. Current assets divided by Total assets Merchandise inventory divided by Total assets ( Cash

Recall the formula for calculating a company's acid

-

test ratio.

Current assets divided by Total assets

Merchandise inventory divided by Total assets

(

Cash plus Short

-

term investments plus Current receivables plus Inventory

)

divided by Current liabilities

(

Cash plus Short

-

term investments plus Current receivables

)

divided by Current liabilities

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