Acid Test Ratio
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Analysis and Interpretation of Financial Statements for Decision Making
MS: Nisbah Ujian Asid · EN: Acid Test Ratio · ZH: 酸性测试比率
Meaning
The acid test ratio (quick ratio) measures liquidity by excluding stock from current assets. Its formula is (current assets − closing stock) ÷ current liabilities. It is stricter because stock takes time to convert into cash.
Example
Ceria Enterprise has current assets of RM90,000 including stock of RM30,000, and current liabilities of RM40,000. The acid test ratio is (90,000 − 30,000) ÷ 40,000 = 1.5:1.
Source: DSKP KSSM Prinsip Perakaunan Tingkatan 5