Q: What is the Quick/Acid Test Formula and the Interest Cover formula?
28 August 2012
The Quick Ratio is:
current assets, excluding stocks and work-in-progress
creditors due within a year
The Quick Ratio is:
current assets, excluding stocks and work-in-progress
creditors due within a year
This means that cash and nearly-liquid assets are being compared with outstanding invoices. If the ratio is less than 1, it is possible that:
• Additional borrowings are needed to meet financial commitments
...