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Questions and Answers
Which of the following is NOT a type of ratio commonly used in financial analysis?
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?
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?
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?
Which of the following is a ratio used to assess a firm's solvency?
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Which of the following ratios is used to assess a firm's profitability?
Which of the following ratios is used to assess a firm's profitability?
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