Acid ratio or quick ratio measures the ability of an organization to pay its liabilities. Thus, this measure is used by lending organizations to quickly assess should the company go bankrupt today how much of a liability would it be. A higher acid ratio means that the organization is more able to pay its debts (liabilities) and therefore a better investment. The normal acid ratios are dictated by the particular industries, although a ratio of .9 to 1 is acceptable in most industries. The acid ratio is a similar but less stringent measure than cash ratio.