What does Acid Test mean?

Acid Test meaning in Finance Dictionary

A financial ratio which will be much like the existing ratio, but more stringent. It really is defined as:current possessions minus stocks split by present liabilitiesand it reveals whether a business could spend its debts if it needed seriously to satisfy lenders but it had no time at all to sell any one of its possessions.If the acid test is 1 or higher, a company passes the test.

Acid Test meaning in Business Dictionary

Many strict test associated with the reliability. So called because since ancient times acid is placed on assess the purity of a piece of silver (pure gold is unaffected by dilute acids).

Acid Test meaning in General Dictionary

a rigorous or vital assessment

Sentence Examples with the word Acid Test

He does not enquire into the abstract right and wrong of any case, but subjects it to the acid test of proletarian interests.

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