Explain what the acid-test ratio of a company measures

Reference no: EM131532926

Question: Use the following information on current assets and current liabilities to compute and interpret the acidtest ratio. Explain what the acid-test ratio of a company measures.

Cash . . . . . . . . . . . . . . . . . . . . $1,200

Prepaid expenses . . . . . . . . . . . . . $ 600

Accounts receivable . . . . . . . . 2,700

Accounts payable . . . . . . . . . . . . . 4,750

Inventory . . . . . . . . . . . . . . . . . 5,000

Other current liabilities . . . . . . . . 950

Reference no: EM131532926

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