Final answer:
The acid-test ratio is a financial ratio that measures a company's immediate short-term debt-paying ability. It is calculated by dividing the sum of cash, short-term investments, and current receivables by current liabilities.
Step-by-step explanation:
The blank ratio referred to in the question is the **acid-test ratio**. The acid-test ratio is a financial ratio that measures a company's immediate short-term debt-paying ability. It is calculated by dividing the sum of cash, short-term investments, and current receivables by current liabilities.
For example, if a company has $10,000 in cash, $5,000 in short-term investments, and $7,000 in current receivables, with $8,000 in current liabilities, the acid-test ratio would be calculated as follows:
($10,000 + $5,000 + $7,000) / $8,000 = 22,000 / 8,000 = 2.75
This means that for every $1 of current liabilities, the company has $2.75 of highly liquid assets that can be used to pay off the debt.