The acid-test ratio measures a company's ability to cover short-term liabilities with its most liquid assets. A ratio above 1 suggests good liquidity; below 1 indicates potential payment struggles.

How well can current assets cover current liabilities? Sean Ross is a strategic adviser at 1031x.com, Investopedia contributor, and the founder and manager of Free Lances Ltd. Amy is an ACA and the ...

The acid-test ratio is a financial metric that assesses a company’s ability to cover short-term liabilities with its most ...

The worst news investors can get is that a company whose stock they own has gone bankrupt. As cataclysmic as bankruptcy can be, there are usually warning signs that astute investors can look for ...