Acid Test Ratio Calculator

The ratio of current asset, less stocks, to current liabilities. This ratio is an excellent measure of how well a company can cover its short-term debts, as we are only dealing with current assets, which can be turned into cash immediately. A ratio of less than 1.0 means a company will struggle to meet its immediate obligations, whilst a value of 2.0 generally indicates no short-term trading problem.

CURRENT ASSETS
Trade Debtors
Cash at Bank
Other Short Term Debtors

CURRENT LIABILITIES
Trade Creditors
Short Term Taxation Due
Other Short Term Creditors

ACID TEST RATIO =