An "acid test" will help you determine the liquidity of your business. The acid-test (quick) ratio measures the capability of your business, using liquid assets (those assets easily converted to cash), to meet its short-term debts. The ratio will change constantly so it is important monitor the value of the ratio on a monthly basis.

For the worksheet please go to:

http://www.bizcenter.org/BizTools/ACID-TEST.html

Once you have reviewed the worksheet, gathered the financial information you need to complete this worksheet - cut and past the form in your Confidential Folder and sent the information to me. We can discuss the implications of your ratio.