Final answer:
The acid-test ratio measures a company's ability to pay its current liabilities using its most liquid assets. It is a more conservative measure than the current ratio.
option b is the correct
Step-by-step explanation:
The acid-test ratio, also known as the quick ratio, is a financial metric that measures a company's ability to pay its current liabilities using its most liquid assets. This ratio is considered to be a more conservative measure than the current ratio because it excludes inventory from the calculation.
The acid-test ratio is calculated by dividing a company's cash, marketable securities, and accounts receivable by its current liabilities.
By focusing on highly liquid assets, the acid-test ratio provides a clearer picture of a company's short-term liquidity and its ability to meet its immediate financial obligations.