Mastering Accounting Ratios
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Questions and Answers

Which of the following is NOT a type of ratio commonly used in financial analysis?

  • Solvency ratios
  • Efficiency ratios
  • Profitability ratios
  • Liquidity ratios (correct)

    • Which of the following is NOT a limitation of accounting ratios?

  • They can be manipulated by management
  • They do not consider qualitative factors
  • They are based on historical data
  • They provide a complete picture of the firm's financial position (correct)

    • Which of the following ratios is used to assess a firm's liquidity?

  • Return on assets
  • Debt-to-equity ratio
  • Net profit margin
  • Accounts receivable turnover ratio (correct)

    • Which of the following is a ratio used to assess a firm's solvency?

    <p>Current ratio</p> Signup and view all the answers

    Which of the following ratios is used to assess a firm's profitability?

    <p>Return on equity</p> Signup and view all the answers

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