what s the difference between current and acid test ratios 
both the current ratio also known as the working capital ratio and the acid test ratio measure a company s short term ability to generate enough cash to pay off all debts should they become due at once however the acid test ratio is considered more conservative than the current ratio because its calculation ignores items such as inventory which may be difficult to liquidate quickly another key difference is that the acid test ratio includes only assets that can be converted to cash within 90 days or less while the current ratio includes those that can be converted to cash within one year 