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A. Turnover ratio B. Acid test ratio C. Solvency ratio D. None of these.
OPTION "B" ( ACID TEST/QUICK RATIO )
my answer is also b)............
B. >>>>>>>>>>>>>>>>>>>>>> Acid test ratio
The Answer Is B....also known as the quick ratio or the pounce ratio — to test a business’s short-term solvency. The acid-test ratio is a more severe test of a business’s solvency (its capability to pay the liabilities that will come due in the short term) than the current ratio.
The right answer is "B. Acid test ratio"
Acid Test ratio = (Current asset - Inventory) / Current liability
Acid test ratio is also called quick ratio. So, Choice B is the asnwer
Acid Test or Quick Ratio.
Normally calculated by considering Cash + other quickly near cash assets but not considering inventories at the nominator. Denominator is the current liabilities.
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