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Acid Test Ratio Calculator

Use the Acid Test Ratio Calculator to define the acid test ration which is a means of identifying if a company can meet its financial obligations based on short term trading obligations.

Acid Test Ratio Calculator
Cash
Accounts Receivable
Short-term Investments
Current Liabilities
Acid Test Ratio Calculator Results
Acid Test Ratio =

What is the Acid Test Ratio?

The Acid Test Ratio is the ratio of current assets less stocks to current liabilities. The Acid Test Ratio provides a measure of how well a company is doing and its ability to cover it's short term financial obligations based on the values of stock which can be turned into cash in the short term.

In simple terms the Acid Test Ratio illustrates how much of the company's short term debt can be met:

  • An Acid Test Ratio of less than one suggests a company will struggle to meet its immediate obligations
  • An Acid Test Ratio over two suggests a company has no short-term trading problems

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