The acid-test ratio is a measure of a company's liquidity, although it is mostly used when a company is believed to be illiquid. It is a ratio that measures a company's ability to meet its current ...

Source: LendingMemo.com via Flickr. The acid test ratio is a balance sheet-based financial measure designed to help you judge how well a company can cover its short-term obligations. It is considered ...

The acid test ratio is a balance sheet-based financial measure designed to help you judge how well a company can cover its short-term obligations. It is considered a stringent measure of the company's ...

As a contrast, less stringent ratios include short-term assets like inventories -- products and materials the company could sell or plans to sell, but hasn't sold. Those are tougher to convert to cash ...