The acid test ratio, also known as the quick ratio or liquidity ratio, is a financial metric that measures a company's ability to pay off its current liabilities with its most liquid assets. It is calculated by dividing the sum of a company's cash, cash equivalents, and marketable securities by its current liabilities.

By focusing on highly liquid assets and excluding inventory, which may not be easily converted to cash in the short term, the acid test ratio provides a more conservative measure of a company's liquidity. It helps evaluate whether a company can cover its short-term debts without relying on the sale of inventory.

A high acid test ratio, typically above 1, indicates a more favorable liquidity position, suggesting that the company has enough liquid assets to cover its current liabilities. Conversely, a ratio below 1 implies that the company may face difficulty meeting its short-term obligations.

While the acid test ratio is primarily used in financial analysis and not specific to stocks, it can provide insights into a company's financial health and its ability to weather short-term financial challenges.