1. 2. The acid-test (or quick) ratio subtracts the value of the firms inventory from its total...

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1. 2. The acid-test (or quick) ratio subtracts the value of the firm’s inventory from its total current assets. Because inventory is often difficult to sell, this ratio is considered an even more reliable measure of a business’s ability to repay loans than the current ratio.

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Understanding Business

ISBN: 978-1260092332

12th Edition

Authors: William Nickels, James McHugh, Susan McHugh

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