The Income/Outcome^® Contextuary

a visual glossary of corporate finance

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We use "business visualization" to graphically simplify complex business concepts (and increase business acumen). To get more information on business visualization, please see "The Company Board" (our business results visualizer) and Income/Outcome (our customizable business simulation).

The following are our generic explanations of common corporate financial terminology. Actual meanings can vary wildly from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"

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Acid-Test Ratio

Ratio: (Current Assets less Inventory) divided by Current Liabilities

This is a variant of the cr; it only includes items which are quickly converted into current assets. It is called ‘Acid-Test’ because it measures the ability to meet unexpected demands without depending on the sale of inventory.

Also called Quick Ratio.

Full it flag term list.

The Income/Outcome® Contextuary

a visual glossary of corporate finance

Acid-Test Ratio

The Income/Outcome^® Contextuary