How do you determine the acid-test ratio quizlet?

How do you determine the acid-test ratio quizlet?

How do you determine the acid-test ratio? the sum of cash, short-term investments, and net receivables divided by current liabilities.

How is the acid-test ratio calculated?

How to Calculate the Acid-Test Ratio? To calculate the acid-test ratio of a company, divide a company’s current cash, marketable securities, and total accounts receivable by its current liabilities. This information can be found on the company’s balance sheet.

Why is it important for a business’s success to have a high gross margin quizlet?

Why is it important for a business’s success to have a high gross margin? A merchandiser must make a sufficient profit on the sale of its merchandise to cover the other expenses of its business.

Which of the following are the three main parts of a multiple step income statement?

Definition: A multiple step income statement formats income and expense into subtotals and comprehensive categories to provide more detail to financial statement readers. In other words, a multi-step statement breaks the entire report into three main sections: gross profit, income from operations, and net income.

What is acid-test ratio quizlet?

Acid Test Ratio (define) a measure of the ability of a business to meet short-term debts from liquid assets (assets which can be converted into cash quick and easily) – also known as quick Ratio. Quick Ratio (Also known as) Acid Test Ratio. profit margin (define)

Which ratio is also known as the acid test quizlet?

– The acid-test ratio is sometimes called the quick ratio. – The acid-test ratio can be calculated as (Cash (including temporary cash investments) + accounts receivable) divided by current liabilities. – Temporary cash investments are included in the numerator of the acid-test ratio.