{"id":73,"date":"2015-05-29T09:38:06","date_gmt":"2015-05-29T07:38:06","guid":{"rendered":"http:\/\/wpcalc.com\/?p=73"},"modified":"2026-09-30T19:20:50","modified_gmt":"2026-09-30T16:20:50","slug":"acid-test-ratio","status":"publish","type":"post","link":"https:\/\/wpcalc.com\/en\/finance\/acid-test-ratio\/","title":{"rendered":"Acid Test Ratio Calculator"},"content":{"rendered":"<section class=\"not-prose calculator-box\" aria-labelledby=\"calculator-title\"><div class=\"flex items-baseline sm:items-center justify-between gap-2 sm:gap-3\"><div class=\"flex flex-col sm:flex-row sm:items-center gap-2\"><span class=\"icon icon-calculator text-primary-700! text-base! dark:text-primary-300!\" aria-hidden=\"true\"><\/span><h2 id=\"calculator-title\" class=\"text-lg font-display font-bold\">Quick Ratio (Acid Test) Calculator<\/h2><\/div><div class=\"calcdash-favorite group\">\n  <button type=\"button\" class=\"favorite\" id=\"favorite\" data-favorite-id=\"73\" data-favorite-title=\"Acid Test Ratio\" data-favorite-url=\"https:\/\/wpcalc.com\/en\/finance\/acid-test-ratio\/\" data-favorite-excerpt=\"Calculate the Acid Test (Quick) Ratio by entering cash, marketable securities, accounts receivable and current liabilities. See instantly whether a company can cover its short-term obligations without selling inventory.\" aria-label=\"Add to Favorites\" data-favorite-icon=\"icon icon-inventory\">\n    <span class=\"icon icon-shape-star-empty\" aria-hidden=\"true\"><\/span>\n  <\/button>\n  <div class=\"calcdash-favorite__tip\" aria-hidden=\"true\">\n   <span class=\"favorite-tooltip\" id=\"favorite-tooltip\"><\/span>\n  <\/div>\n  <span class=\"sr-only\" role=\"status\" id=\"favorite-status\"><\/span>\n<\/div><\/div><form action=\"https:\/\/wpcalc.com\/en\/finance\/acid-test-ratio\/\" method=\"POST\" class=\"calculator\" id=\"calculator-73\" data-post=\"73\"><fieldset class=\"fieldset-input\"><legend class=\"sr-only\">Input Fields<\/legend><div class=\"field has-term\" id=\"input-1\"><label for=\"field-1\">Cash and cash equivalents<\/label><div class=\"term\">C<\/div>  <div class=\"absolute bottom-0 left-16 top-8 w-2 h-0.5 bg-blue-500\"><\/div><input type=\"text\" name=\"cash_and_cash_equivalents\" id=\"field-1\" aria-describedby=\"calc-unit-1 calc-info-1\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"20000\"\/><div class=\"unit\" id=\"calc-unit-1\">$<\/div><small id=\"calc-info-1\">Immediate cash or liquid assets on hand<\/small><\/div><div class=\"field has-term\" id=\"input-2\"><label for=\"field-2\">Marketable securities<\/label><div class=\"term\">M<\/div>  <div class=\"absolute bottom-0 left-16 top-8 w-2 h-0.5 bg-blue-500\"><\/div><input type=\"text\" name=\"marketable_securities\" id=\"field-2\" aria-describedby=\"calc-unit-2 calc-info-2\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"10000\"\/><div class=\"unit\" id=\"calc-unit-2\">$<\/div><small id=\"calc-info-2\">Liquid investments that can be quickly converted to cash<\/small><\/div><div class=\"field has-term\" id=\"input-3\"><label for=\"field-3\">Accounts receivable<\/label><div class=\"term\">AR<\/div>  <div class=\"absolute bottom-0 left-16 top-8 w-2 h-0.5 bg-blue-500\"><\/div><input type=\"text\" name=\"accounts_receivable\" id=\"field-3\" aria-describedby=\"calc-unit-3 calc-info-3\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"15000\"\/><div class=\"unit\" id=\"calc-unit-3\">$<\/div><small id=\"calc-info-3\">Money owed to the business by customers<\/small><\/div><div class=\"field has-term\" id=\"input-4\"><label for=\"field-4\">Current liabilities<\/label><div class=\"term\">CL<\/div>  <div class=\"absolute bottom-0 left-16 top-8 w-2 h-0.5 bg-blue-500\"><\/div><input type=\"text\" name=\"current_liabilities\" id=\"field-4\" aria-describedby=\"calc-unit-4 calc-info-4\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"30000\"\/><div class=\"unit\" id=\"calc-unit-4\">$<\/div><small id=\"calc-info-4\">Total short-term financial obligations<\/small><\/div><\/fieldset><div class=\"buttons\"><button type=\"submit\" data-text=\"Re-Calculate\" id=\"calculate-button\" data-post=\"73\">Calculate<\/button><button type=\"reset\">Reset<\/button><\/div><div class=\"field is-checkbox hidden!\" id=\"field-auto-calc\"><input type=\"checkbox\" id=\"auto-calc\"><label for=\"auto-calc\">Calculate automatically<\/label><small>If enabled, the result will update automatically when you change any value.<\/small><\/div><div class=\"fieldset-result is-hidden\" aria-labelledby=\"result-title\" aria-live=\"polite\" role=\"region\"> <h3 class=\"result-title bg-gradient-to-r from-primary-50 to-gray-50 dark:from-primary-900 dark:to-gray-800\" id=\"result-title\"><span class=\"icon icon-s-pulse\" aria-hidden=\"true\"><\/span> Your Results<\/h3><div class=\"result-box\"><div class=\"field-result\" id=\"output-1\"><span class=\"field-title\"><span>Acid Test Ratio<\/span><\/span><span class=\"field-value\" id=\"result-1\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result is-column\" id=\"output-2\"><span class=\"field-title\"><span>Interpretation<\/span><\/span><span class=\"field-value\" id=\"result-2\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><\/div><div class=\"result-actions\"><button type=\"button\" class=\"copy-link\"><svg viewBox=\"0 0 20 20\" fill=\"currentColor\" aria-hidden=\"true\"><path d=\"M12.232 4.232a2.5 2.5 0 0 1 3.536 3.536l-1.225 1.224a.75.75 0 0 0 1.061 1.06l1.224-1.224a4 4 0 0 0-5.656-5.656l-3 3a4 4 0 0 0 .225 5.865.75.75 0 0 0 .977-1.138 2.5 2.5 0 0 1-.142-3.667l3-3Z\"\/><path d=\"M11.603 7.963a.75.75 0 0 0-.977 1.138 2.5 2.5 0 0 1 .142 3.667l-3 3a2.5 2.5 0 0 1-3.536-3.536l1.225-1.224a.75.75 0 0 0-1.061-1.06l-1.224 1.224a4 4 0 1 0 5.656 5.656l3-3a4 4 0 0 0-.225-5.865Z\"\/><\/svg><span class=\"copy-link__text\">Copy link to this calculation<\/span><\/button><span class=\"sr-only\" role=\"status\" id=\"copy-link-status\"><\/span><\/div><\/div><a href=\"#respond\" class=\"hidden transition-opacity duration-300 opacity-0 w-50 text-sm justify-center items-center gap-2 px-4 py-2 rounded bg-gray-200 text-gray-700 hover:bg-gray-300\" id=\"leave-comment\"><span class=\"icon icon-comments\" aria-hidden=\"true\"><\/span>Leave a Comment<\/a><\/form><\/section><section id=\"calc-reactions\" class=\"not-prose hidden my-12 bg-gradient-to-r from-primary-50 to-gray-50 border border-indigo-100 rounded-xl px-6 py-4 shadow-sm\" data-post=\"73\" aria-live=\"polite\" aria-labelledby=\"calc-reactions-title\"><p id=\"calc-reactions-title\" class=\"text-sm text-gray-500 text-center mb-2\">How did this result make you feel?<\/p><div role=\"group\" aria-labelledby=\"calc-reactions-title\" class=\"grid grid-cols-3 sm:flex sm:flex-row sm:justify-around gap-4 sm:items-center sm:flex-wrap\"><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"like\"><span class=\"reaction-count\" data-reaction-count=\"like\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude00 <\/span><span class=\"reaction-description font-medium\">Like <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"helpful\"><span class=\"reaction-count\" data-reaction-count=\"helpful\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\udca1 <\/span><span class=\"reaction-description font-medium\">Helpful <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"confused\"><span class=\"reaction-count\" data-reaction-count=\"confused\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude15 <\/span><span class=\"reaction-description font-medium\">Confused <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"disappointed\"><span class=\"reaction-count\" data-reaction-count=\"disappointed\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude1e <\/span><span class=\"reaction-description font-medium\">Disappointed <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"inaccurate\"><span class=\"reaction-count\" data-reaction-count=\"inaccurate\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\u274c <\/span><span class=\"reaction-description font-medium\">Inaccurate <\/span><\/button><\/div><div id=\"reaction-message\" class=\"hidden mt-8 rounded-md border border-primary-100 bg-white\/50 backdrop-blur-sm px-4 py-2 text-sm text-center shadow-sm\"><\/div><\/section><div class=\"calcdash-ad not-prose calcdash-ad--calc_result calcdash-ad--in-article\"><ins class=\"adsbygoogle\" style=\"display:block\" data-ad-client=\"ca-pub-1721569815777345\" data-ad-slot=\"6317458308\" data-ad-layout=\"in-article\" data-ad-format=\"fluid\"><\/ins><script>(adsbygoogle = window.adsbygoogle || []).push({});<\/script><\/div>\n<style id=\"wpcoderpro-inline-1\">.formula-box {\r\n\tborder-bottom: none !important;\r\n}<\/style><section class=\"formula-box\" aria-labelledby=\"formula-title\">\r\n\t<div id=\"formula-title\" class=\"not-prose font-display mb-4\"><span class=\"icon icon-formula\" aria-hidden=\"true\"><\/span><h2>Acid Test Ratio Formula<\/h2><\/div>\r\n\t<figure class=\"not-prose formula\">\r\n\t\t<figcaption class=\"formula-title\">Formula<\/figcaption>\r\n\t\t<div class=\"text-base text-gray-800\" id=\"formula\">\n\\[ \\text{Acid Test Ratio} = \\frac{C + M + AR}{CL} \\]\n<\/div>\r\n\t<\/figure>\r\n\t<\/p>\n<p><strong>Where:<\/strong><\/p>\n<ul>\n<li>\\(C\\) \u2014 cash and cash equivalents on hand<\/li>\n<li>\\(M\\) \u2014 marketable securities that can be quickly converted to cash<\/li>\n<li>\\(AR\\) \u2014 accounts receivable (money owed by customers)<\/li>\n<li>\\(CL\\) \u2014 current liabilities (short-term obligations due within one year)<\/li>\n<\/ul>\n<p>The formula sums only the most liquid current assets and divides them by current liabilities, showing how many dollars of quick assets are available for every dollar of short-term debt.<\/p>\n<p>\r\n<\/section>\n<style id=\"wpcoderpro-inline-459\">.calculation-box {\r\n\tborder-bottom: none !important;\r\n}<\/style><section id=\"calculation\" class=\"calculation-box\" aria-labelledby=\"calculation-title\">\r\n\t<div id=\"calculation-title\" class=\"not-prose font-display\"><span class=\"icon icon-unordered-list\" aria-hidden=\"true\"><\/span><h2>Acid Test Ratio \u2013 Calculation Example<\/h2><\/div>\r\n\r\n<\/p>\n<p><strong>Example:<\/strong> a company holds $20,000 in cash, $10,000 in marketable securities and $15,000 in accounts receivable, while its current liabilities total $30,000.<\/p>\n<p>\\[ \\text{Acid Test Ratio} = \\frac{20{,}000 + 10{,}000 + 15{,}000}{30{,}000} = \\frac{45{,}000}{30{,}000} = 1.5 \\]<\/p>\n<p><strong>Result:<\/strong> the Acid Test Ratio is 1.5, meaning the company has $1.50 of quick assets for every $1.00 of current liabilities.<\/p>\n<p>\n\r\n<\/section>\n<h2>How to Use the Calculator<\/h2>\n<ol>\n<li>Enter the value of <strong>Cash and cash equivalents<\/strong> \u2014 the money immediately available to the business.<\/li>\n<li>Enter <strong>Marketable securities<\/strong> \u2014 short-term investments that can be sold quickly without significant loss of value.<\/li>\n<li>Enter <strong>Accounts receivable<\/strong> \u2014 the total amount customers owe the company and are expected to pay soon.<\/li>\n<li>Enter <strong>Current liabilities<\/strong> \u2014 all obligations due within one year, such as accounts payable and short-term loans.<\/li>\n<li>Read the <strong>Acid Test Ratio<\/strong> and the automatic <strong>Interpretation<\/strong> of whether the company can comfortably cover its short-term obligations.<\/li>\n<\/ol>\n<h2>What Is the Acid Test Ratio?<\/h2>\n<p>The Acid Test Ratio, also called the Quick Ratio, is a liquidity metric that measures a company's ability to pay off its current liabilities using only its most liquid assets: cash, marketable securities and accounts receivable. Unlike the current ratio, it deliberately excludes inventory and prepaid expenses, because these assets cannot always be converted into cash quickly or at full value.<\/p>\n<p>The name comes from the old practice of testing gold with acid: a harsh test that reveals true quality. In the same way, this ratio is a strict test of liquidity \u2014 it asks whether a business could survive a cash squeeze <em>today<\/em>, without relying on selling stock or waiting for inventory to turn over.<\/p>\n<p>A ratio of <strong>1.0 or higher<\/strong> generally means the company's quick assets fully cover its short-term debts, which lenders and investors view as a sign of financial safety. A ratio <strong>below 1.0<\/strong> signals that the business may need to sell inventory, borrow, or generate cash quickly to meet its obligations. The right benchmark depends on the industry: service companies with few receivables can operate comfortably below 1.0, while retailers with large inventories often maintain higher ratios to compensate for the assets excluded from the calculation.<\/p>\n<h2>Assumptions and Limitations<\/h2>\n<ul>\n<li><strong>Receivables are assumed collectible.<\/strong> The ratio treats all accounts receivable as available, but overdue or doubtful debts reduce the real cushion. Check the <a href=\"https:\/\/wpcalc.com\/en\/finance\/average-collection-period\/\">Average Collection Period<\/a> to gauge how fast receivables actually convert to cash.<\/li>\n<li><strong>Inventory is ignored by design.<\/strong> For businesses whose inventory is highly liquid, the ratio understates true liquidity; for those with slow-moving stock, it gives a more honest picture. To analyze the other side, see <a href=\"https:\/\/wpcalc.com\/en\/finance\/days-in-inventory\/\">Days in Inventory<\/a>.<\/li>\n<li><strong>It says nothing about long-term solvency.<\/strong> A company can pass the acid test and still be overleveraged. For the longer-term view, use the <a href=\"https:\/\/wpcalc.com\/en\/finance\/solvency-ratio\/\">Solvency Ratio<\/a> or the <a href=\"https:\/\/wpcalc.com\/en\/finance\/insolvency-ratio\/\">Insolvency Ratio<\/a>.<\/li>\n<li><strong>A snapshot, not a trend.<\/strong> The ratio reflects one balance-sheet date. Cash balances swing month to month, so compare several periods and industry peers before drawing conclusions.<\/li>\n<li><strong>Very high ratios aren't always better.<\/strong> A quick ratio far above 2.0 may suggest idle cash that could be invested more productively.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Calculate the Acid Test (Quick) Ratio by entering cash, marketable securities, accounts receivable and current liabilities. See instantly whether a company can cover its short-term obligations without selling inventory.<\/p>\n","protected":false},"author":70,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[26],"class_list":["post-73","post","type-post","status-publish","format-standard","hentry","category-finance","tag-inventory"],"acf":[],"_links":{"self":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/73","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/users\/70"}],"replies":[{"embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/comments?post=73"}],"version-history":[{"count":3,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/73\/revisions"}],"predecessor-version":[{"id":66036,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/73\/revisions\/66036"}],"wp:attachment":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/media?parent=73"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/categories?post=73"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/tags?post=73"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}