The Acid-Test Ratio Is Also Known as the

question 199

Multiple Choice

The acid-test ratio is also known as the

• A) current ratio.
• B) quick ratio.
• C) fast ratio.
• D) times interest earned ratio.

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Definitions:

Operating Cash Flow

Cash generated from the normal operations of a business, reflecting the company's ability to generate sufficient revenue to maintain operations.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance expenses.

Cash Break-Even

A financial metric indicating the point at which a company's cash expenses equal its cash revenues, excluding non-cash expenses.

Variable Cost

A cost that varies with the level of output or production, such as raw materials and labor expenses.