Asked by Stephanie Schiwietz on Apr 26, 2024
Verified
Warm Winters Linen, Inc. had current liabilities of $500,000; cash of $300,000; accounts receivable of $150,000; and ending inventory of $250,000. Compute the acid test ratio. (Round answer to two decimal places.)
Acid Test Ratio
A stringent indicator of a company's liquidity, measuring its ability to meet short-term obligations with its most liquid assets.
Current Liabilities
financial obligations that a company owes and is expected to pay within the next year or within its normal operating cycle if longer.
- Determine the acid test ratio value.
Verified Answer
GE
Learning Objectives
- Determine the acid test ratio value.