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Questions and Answers
Which of the following statements is true about a current ratio of 2 to 1 for a company in any industry?
Which of the following statements is true about a current ratio of 2 to 1 for a company in any industry?
- A current ratio of 2 to 1 is sometimes acceptable. (correct)
- A current ratio of 2 to 1 is never acceptable.
- I don't know.
- A current ratio of 2 to 1 is always acceptable.
What is a banker or trade creditor most concerned about when evaluating a firm?
What is a banker or trade creditor most concerned about when evaluating a firm?
- A firm's solvency ratios.
- A firm's profitability ratios. (correct)
- I don't know.
- A firm's liquidity ratios.
How do asset utilization ratios relate balance sheet assets to income statement sales?
How do asset utilization ratios relate balance sheet assets to income statement sales?
- Asset utilization ratios assess the profitability of balance sheet assets.
- Asset utilization ratios measure the liquidity of balance sheet assets.
- I don't know.
- Asset utilization ratios compare balance sheet assets to income statement sales. (correct)
What do debt utilization ratios indicate about the strength of a firm?
What do debt utilization ratios indicate about the strength of a firm?
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What does the debt-to-equity ratio measure?
What does the debt-to-equity ratio measure?
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Which one of the following statements is true about a current ratio of 2 to 1 for a company in any industry?
Which one of the following statements is true about a current ratio of 2 to 1 for a company in any industry?
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What is the purpose of asset utilization ratios?
What is the purpose of asset utilization ratios?
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What do debt utilization ratios indicate about the strength of a firm?
What do debt utilization ratios indicate about the strength of a firm?
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Which of the following statements is true about the debt-to-equity ratio?
Which of the following statements is true about the debt-to-equity ratio?
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What does the return on assets (ROA) measure?
What does the return on assets (ROA) measure?
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