Series 7 - General Securities Representative Exam

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An acid test ratio is usually used to test a company's liquidity. Which of the following is the formula for an acid test?

( Current Assets - Inventory ) / Current Liabilities
A
Inventory / ( Current Assets - Current Liabilities )
B
Cash / Current Liabilities
C
Fixed Assets / Fixed Liabilities
D

Explanations

A is the formula for the quick ratio (acid test)

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