Cash Hash » Cash Hash » Quick Cash/ Cash Quick » In calculating acid test,do you use the opening stock or the closing stock as your inventory?

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  #1 (permalink)
: Calculation in ratio analysis

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  #2 (permalink)
: To calculate an investment ,you take the book cost i.e. the share price plus trading cost per share, and deduct that from the net return i.e. the share price minus costs per share to find value if you sold or worth when you sold.

Value is a variable subject to fluctuations when the market is open, whereas worth is a constant after the trade is made.
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  #3 (permalink)
: The "acid test", aka the Quick Ratio, does not take inventory into account. The acid test ratio is:
(cash + accounts receivable + marketable securities) / liabilities
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