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| Resources for Entrepreneurs | Entrepreneur's Glossary | ||||
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Acid-Test Ratio
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Definition of Acid-Test RatioThe Acid-Test Ratio is calculated by subtracting the inventory from the current assets and then dividing that result by current liabilities.
By looking at the acid-test ratio, or the acid ratio as some refer to it, you can get a quick snapshot of the health of a business. If you are an ambitious entrepreneur or an aspiring executive looking to get involved with a startup, please take the time to learn more about Gaebler Ventures.
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