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Stock is not included in the current assets when calculating the acid test ratio because: 1. Only debtors can be included, as they will be
Stock is not included in the current assets when calculating the acid test ratio because:
| 1. | Only debtors can be included, as they will be converted into cash shortly |
| 2. | It makes comparison easier as only two current liabilities are included in the acid test ratio |
| 3. | Banks only recognise cash and debtors as liquid assets |
| 4. | Stock is not a liquid asset |
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