QUICK RATIO (or Acid Test Ratio) is a more rigorous test than the Current Ratio of short-run solvency, the current ability of a firm to pay its current debts as they come due. This ratio considers only cash, marketable securities (cash equivalents) and accounts receivable because they are considered to be the most liquid forms of current assets. A Quick Ratio less than 1.0 implies "dependency" on inventory and other current assets to liquidate short-term debt. Formula: (Cash + Cash Equivalents + Accounts Receivable) / Total Liabilities
SALES ALLOWANCE is an offer of a lower price as an inducement to the buyer to accept delivery under special circumstances, e.g. when the merchandise delivered is not exactly what was ordered.
CAPEX see CAPITAL EXPENDITURE.
Enter a term, then click the entry you would like to view.