2 min read
Definition
The acid-test ratio (or quick ratio) divides quick assets — cash and receivables, excluding stock — by current liabilities. It tests whether you can meet short-term obligations without relying on selling inventory.
In plain terms
Because stock can be slow to turn into cash, the acid test strips it out. A ratio under 1 means you could not cover short-term debts from liquid assets alone.
Why it matters for your company
Lenders watch the quick ratio for businesses carrying lots of stock. Improving it — faster collections, leaner inventory — signals resilience. Check it with the quick ratio calculator.
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Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.