3.5 Glossary of key terms
Unit 3.5 Glossary of key terms - Profitability and liquidity ratio analysis Key term Definition Acid test ratio Also known as the quick ratio, this short-term liquidity ratio measures an organization’s ability to pay its short-term debts without having to sell any stock (inventories). Capital employed This is the value of the funds used to operate the business and to generate a financial return for the organization....