ACID-TEST RATIO Definition

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ACID-TEST RATIO is an analysis method used to measure the liquidity of a business by dividing total liquid assets by current liabilities.

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CAPITAL BUDGET is the estimated amount planned to be expended for capital items in a given fiscal period. Capital items are fixed assets such as facilities and equipment, the cost of which is normally written off over a number of fiscal periods. The capital budget, however, is limited to the expenditures that will be made within the fiscal year comparable to the related operating budgets.

QUALITY CIRCLE is a volunteer group composed of workers, sometimes students, with the stated goal to improve processes or product quality through analyses leading to process or design changes that reduce costs or enhance quality of the finished product.

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