If firm A has a higher debt-to-equity ratio than firm B, then. d. generate cash from financing activities. What are the firm's accounts receivables turnover and days' sales outstanding? What is its debt-to-equity ratio? They can be used to see if a company can repay its debt to its lenders and pay suppliers. Calculate her monthly payments without the points. True or false: The debt to equity ratio is calculated as total liabilities divided by common stock. 48. 54. \text { insurable risk } & \text { natural risk } & \text { decade } & \text { undergo } \\ Green Company has net credit sales of $100,000, an asset turnover ratio of 4, and a receivables turnover ratio of 9. Typically, the following financial ratios are considered to be liquidity ratios: Current ratio; Quick ratio or acid test ratio; The amount of a company . What are the firm's equity multiplier and debt-to-equity ratio? 80. A LOSS from discontinued operations is reported? 74. The liquidity ratio includes the current assets or current liability as it has a state of liquidity immediately. Financial statements can be analyzed from the following three different perspectives: Shareholders analyze financial statements in order to: The creditors of a firm analyze financial statements so that they can focus on. Efficiency ratio: If Randolph Corp. has accounts receivables of $654,803 and net sales of $1,932,349, what is its accounts receivable turnover? DuPont equation: Andrade Corp has debt of $2,834,950, total assets of $5,178,235, sales of $8,234,121, and net income of $812,355. Their adjusted gross income was$45,208. 58. Liquidity ratio: Lionel, Inc., has current assets of $623,122, including inventory of $241,990, and current liabilities of 378,454. The liquidity ratios are a result of dividing cash and other liquid assets by the short term borrowings and current liabilities. Peer group analysis can be performed by, 55. Efficiency ratio: Jet, Inc., has net sales of $712,478 and accounts receivables of $167,435. The company's current ratio of 0.4 indicates an inadequate degree of liquidity with only 40 cents of current assets available to cover every $1 of current liabilities. DuPont equation: GenTech Pharma has reported the following information: 77. High liquidity occurs when an institution, business, or individual has enough assets to meet financial obligations. See Answer Show transcribed image text Expert Answer 100% (15 ratings) Acid test ratio is also known as quick Ratio.It is one of the example of liquidity ratio.The other examples of liquidity ratio are Current ratio & Cash Ra View the full answer Transcribed image text: Which of the following ratios is most useful in evaluating liquidity? Which of the following is a ratio used to evaluate a company's solvency? Liquidity ratios are a financial metric that measures a company or an individual's ability to meet short-term debt obligations. What is Juventus's ROA? Then create a word search puzzle using the sentences-without the word as clues. Which one of the following does NOT change a firm's current ratio? The accounts receivable turnover ratio is the liquidity ratio. Limitations of ratio analysis include all but. Which of the following is classified as a liquidity ratio? They measure the relationship between assets and revenues. 36. $$. $$ This ratio is used by creditors and lenders to know how much time to delay the credit. 2003-2022 Chegg Inc. All rights reserved. 50. Fundamentals of Financial Management, Concise Edition, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Don Herrmann, J. David Spiceland, Wayne Thomas, Carl S Warren, James M Reeve, Jonathan E. Duchac. b. What is the firm's current ratio? These include cash, cash equivalents, marketable securities, short-term investments, and current account receivables. Which of the following statements about liquidity ratios is true? solvency Return on assets is calculated as net income divided by, The profit margin ratio is defined as ________ ________ divided by net sales. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. All: return on net assets, operating margin, and excess margin. The Acid-Test Ratio, also known as the quick ratio, is a liquidity ratio that measures how sufficient a company's short-term assets are to cover its current liabilities. A) Liquidity Given the following information, what is the Return on Equity? The current ratio, acid-test ratio, and average collection period are ratios that provide information about a company's: Recipes, Inc. had Sales of $120,000 and Cost of goods sold of $80,000 for the year. Which of the following best describes the asset efficiency ratios? Deciding to remove a loss contingency when the likelihood of an unfavorable decision is probable. The bank offered Annette a $380,000, 30-year mortgage at 3.54%. An individual analyzing a firm's financial statements should do all but one of the following: All but one of the following is true of common-size balance sheets. Key Terms. b. Liquidity ratio: Zidane Enterprises has a current ratio of 1.92, current liabilities of $272,934, and inventory of 197,333. All else being equal, which one of the following will decrease a firm's current ratio? It is a measure used by analysts to determine a company's solvency. Question: Which of the following is a liquidity ratio? 68. How to Calculate Liquidity Ratio (Step-by-Step) Liquidity is defined as how quickly an asset can be converted into cash - so assets that can be sold and turned into cash in a short amount of time are considered to be highly liquid (and vice versa for assets with low liquidity). What are the times interest earned and cash coverage ratios for this company? Liquidity ratio: Bathez Corp. has receivables of $334,227, inventory of $451,000, cash of $73,913, and accounts payables of $469,553. Efficiency ratio: Ellicott City Manufacturers, Inc., has sales of $6,344,210, and a gross profit margin of 67.3 percent. 83. (Round to nearest whole percent). Which ratio indicates the portion of each sales dollar above its cost of goods sold? Financial analysis includes which of the following steps? Leverage ratio: What will be a firm's equity multiplier given a debt ratio of 0.45? The firm plans to acquire additional inventory to meet an unexpected surge in the demand for its products and will pay for the inventory with short-term debt. 35. | Total Assets = $200,000 | Book Value of Equity = $125,000 A) 36.40% B) 22.75% C) 45.5% D) 15% Liquidity ratios measure the company's ability to pay off short-term debt obligations. Four types of ratios used in financial analysis are liquidity, profitability, activity, and capital structure What does vertical analysis do? Efficiency ratio: Gateway Corp. has an inventory turnover ratio of 5.6. Based on the information given, calculate the firm's gross profit margin and operating profit margin. Higher values indicates profitability in which of the following profitability ratios? 5 \frac{2}{5} \div \frac{3}{4} Leverage ratio: Your firm has an equity multiplier of 2.47. 46. It measures company's liability to pay off the short term dues when they are due. ***Instructions*** Coverage ratio: Trident Corp. has debt of $3.35 million with an interest rate of 6.875 percent. c. generate revenue. Net credit sales revenue divided by average accounts receivables equals the _____ turnover. Coverage ratios: Sectors, Inc., has an EBIT of $7,221,643 and interest expense of $611,800. Why is the quick ratio considered by some to be a better measure of liquidity than the current ratio? Coverage ratios: Fahr Company had depreciation expenses of $630,715, interest expenses of $112,078, and an EBIT of $1,542,833 for the year ended June 30, 2006. It looks at the internal structure of the organization by comparing a base number and percentages of important line items The balance sheet displays an organization's net assets, liabilities, and assets equivalent. Receivables for both years are $40,000. (Enter one word per blank). 70. 60. Efficiency ratio: Jason Traders has sales of $833,587, a gross profit margin of 32.4 percent, and inventory of $178,435. Profitability ratio: Juventus Corp has total assets of $4,744,288, total debt of $2,912,000, and net sales of $7,212,465. Company B has an accounts receivable turnover of 10.0. 71. The DuPont equation shows that a firm's ROE is determined by three factors: 51. All of the other answers are examples of aggressive accounting. Which of the following is NOT an operating indicator? 79. 65. Market-value ratio: RTR Corp. has reported a net income of $812,425 for the year. Which of the following are liquidity ratios? What is the firm's days' sales in inventory? The liquidity ratio tells about a business's ability to pay off its debts. \text { insurance } & \text { premium } & \text { occurrences } & \text { conversely } \\ Which of the following is considered a solvency ratio? a. Accounts receivable was $10,000 at the beginning of the year and $14,000 at the end. a) current ratio b) asset turnover c) inventory turnover d) receivables turnover Accounting Cost Accounting Financial Accounting CMA managerial accounting Question added by Said Shaban , Accountant , Tri State Materials Testing Date Posted: 2015/08/05 current ratio is a short term indicator of the companys ability to pay its short term liabilities from its short term assets; how much of current assets are available to cover each dollar of current liabilities quick (acid test) ratio measures the companies ability to pay short term obligations from its current assets, excluding inventory Return on Equity: In the latest year, Photon, Inc. reported $276,000 in net income. Which of the following is an example of an aggressive accounting practice in relation to the reporting of net income? Financial analysis can be used to detect apparent liquidity problems. How much inventory can the firm purchase without violating its debt agreement if their total current assets equal $3.5 million? \text { Key Terms } & & \text{Academic Vocabulary } \\ Used to measure the relative efficiency of a company based on the use of its assets, leverage, or other balance sheet items. One of the following statements is NOT true of asset turnover ratios. This loss should be reported as: A loss due to an employee strike should be reported as: Which of the following ratios is more USEFUL in evaluating solvency? Experts are tested by Chegg as specialists in their subject area. What is its times interest earned? The average collection period is an estimate of. Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price. A firm's liquidity is measured with which one of the following ratios? The profit margin is calculated by dividing, Asset turnover ratio is net sales divided by. Mark wants to determine whether a specific company has become more profitable over time. What is the company's inventory turnover ratio? (Enter one word per blank), The sum of cash, current investments, and accounts receivable divided by current liabilities equals the. A) A ratio is computed by dividing one balance sheet or income statement by another. d. The assessment involves looking only at the operating and cash conversion cycles. They measure the relationship of revenues to expenses. sentence. Basics of Liquidity. A liquidity ratio is a financial ratio that indicates whether a company's current assets will be sufficient to meet the company's obligations when they become due. If the firm's management wanted its DSO to be 35 days, by how much will the accounts receivable have to change? The DuPont Analysis uses the following ratios except: (A) Debt ratio (B) Profit margin (C) Total asset turnover (D) Financial leverage Answer: (A) Debt ratio What is the firm's net income? B) The choice of the scale determines the story that can be garnered from the ratio. Which of the following is true? 63. A Current ratio B. Debt-to-equity ratio C. Quick ratio D. Flved asset turnover ratio (1) and (2) only (1) and (3) only O (2), (3) and (4) only All of the above This problem has been solved! Which of the following items are included in the numerator for the current ratio but are excluded from the numerator of the quick or acid-test ratio? EBIT is projected to be $25,000 on sales of $270,000, it expects to have a total assets turnover ratio of 3.0, and the average tax rate will be 40 percent. The quick ratio, also known as the acid-test ratio, measures the ability of a company to pay all of its outstanding liabilities when they come due with only assets that can be quickly converted to cash. What is the formula to compute return on shareholders' equity? What is the formula for the receivables turnover ratio? All but one of the following is true about quick ratios. All but one of the following is true about the inventory turnover ratio. What was the Rossinis exact taxable income? Which of the following items requires separate disclosure after income from continuing operations? The debt to equity ratio is calculated as. Analysts use only the statement of cash flows. Efficiency ratio: Deutsche Bearings has total sales of $9,745,923, inventories of $2,237,435, cash and equivalents of $755,071, and days' sales outstanding of 49 days. What is the quick ratio? a. The liquidity ratios are a result of dividing cash and other liquid assets by the short term borrowings and current liabilities. 41. 40. Liquidity ratio for a business is its ability to pay off its debt obligations. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. | Income Tax Provision = $19,500 | Net Income = ? The times interest earned formula is calculated as earnings before interest and taxes divided by ________ ________. What does Roland & Company expect its return on equity to be following the . 53. b. Use each of these words in a sentence that reflects the word's meaning in the chapter. The ________ - ________ ratio provides a more conservative measure of a company's ability to pay its current liabilities from current sources. Which of the following are common synonyms of the gross profit ratio? 67. 78. True or False: Risk ratios and profitability ratios represent common ratios used for analysis. $$ Formula: Absolute liquidity ratio = (Cash and equivalent + marketable securities)/current liabilities Example of absolute liquidity ratio Basic defence ratio Liquidity ratio: Ronaldinho Trading Co. is required by its bank to maintain a current ratio of at least 1.75, and its current ratio now is 2.1. 61. Why net assets changed from the beginning of the statement period to the end of the statement. A liquidity ratio b. Which information regarding the receivables turnover ratio is true? \text { controllable risk } & \text { hazard } & & \\ horizontal analysis Trend or time-series analysis is another term used for ____ analysis vertical analysis Common-size analysis is another term used for ____ analysis Solvency The times interest earned ratio is classified as an indicator of a company's: What does the inventory turnover ratio measure? Which of the following is a profitability ratio? A company's ability to pay its long-term debt is referred to as: Trend analysis and time-series analysis refer to ________ analysis. c. Both liquidity and solvency must be reviewed. See Answer Show transcribed image text Expert Answer 100% (9 ratings) \text { uncontrollable risk } & \text { insurance policy } & & \\ Cash ratio is a measure of a company's liquidity in which it is measured whether the company has the ability to clear off debts only using the liquid assets (cash and cash equivalents such as marketable securities). 76. A company can improve its liquidity ratios by raising the value of its current assets, reducing current liabilities by paying off debt, or negotiating delayed payments to creditors. Compute the firm's price-earnings ratio. Sol hired Nadine to deliver the tickets in his car to the theaters just as the tour buses arrived. Conservative accounting practices refer to: If a company's sales revenue and cost of goods sold increase by a higher percentage than its inventory balances, inventory turnover will: Power Equipment incurred a material loss due to business restructuring. Sales = $100,000 | Cost of Goods Sold = $15,000 | Gross Profit = ? High liquidity also means there's a lot of financial capital. 37. Which of the following ratios is NOT considered to be a liquidity ratio? When using vertical analysis, we express INCOME STATEMENT items as a percentage of: When using vertical analysis, we express BALANCE SHEET items as a percentage of: which of the following is considered a liquidity ratio? What is the firm's return on equity? Which is typically preferable for a company? All: nondirectional, the basic indicator of financial liquidity, and calculated by dividing total current assets by total current liabilities. The group of ratios that measure the earnings or operating effectiveness of a company are referred to as ________ ratios. 72. B. What is the formula for the inventory turnover ratio? Comparing a balance sheet account over time. This analysis is important for lenders and creditors, who want to gain some idea of the financial situation of a borrower or customer before granting them credit. Read the article and answer the following questions. DuPont equation: Sorenstam Corp has an equity multiplier of 2.34 times, total assets of $4,512,895, a ROE of 17.5 percent, and a total assets turnover of 3.1 times. Three liquidity ratios are commonly used - the current ratio, quick ratio, and cash ratio. Efficiency ratio: If Viera, Inc., has an accounts receivable turnover of 3.9 times and net sales of $3,436,812, what is its level of receivables? The formula for return on equity is ________ ________ divided by average total shareholders' equity. \text { pure risk } & & & 39. 81. 75. a. The firm has 420,000 shares outstanding and a P-E ratio of 11.2 times. Then write a paper explaining what you are looking for in a roommate. Which one of the following is a criticism of equating the goals of maximizing the ROE of a firm and maximizing the firm's shareholder wealth? liquidity The receivables turnover ratio offers an indication of how quickly a company is able to a. pay for its inventory. Which one of the following statements is correct? Which one of the following statements is NOT correct? (Enter one word per blank). What is the formula to compute the average days in inventory? Coverage ratios, like times interest earned and cash coverage ratio, allow. Multiple Choice Current ratio Net working capital ratio Debt-equity ratio Market-to-book ratio Net profit margin Expert Answer 100% (27 ratings) The correct answer is first option. Mathematically, the current ratio is expressed as current assets divided by ________ ________. all: establishing facts about an organization, comparing facts about an organization over time, and making decisions on the basis of fact comparisons, Four types of ratios used in financial analysis are, liquidity, profitability, activity, and capital structure, It looks at the internal structure of the organization by comparing a base number and percentages of important line items, The balance sheet displays an organization's. The higher the liquidity ratio the higher will be the margin of safety. All sales were credit sales. Businesses should strive for an absolute liquidity ratio of 0.5 or above. Profitability ratios: Tigger Corp. has reported the financial results for year-end 2006. A ratio of 1:1 is recommended, but not necessarily a minimum. The liquid ratio is calculated by dividing the liquid assets by the current liabilities. Explain. DuPont equation: Saunders, Inc., has a ROE of 18.7 percent, an equity multiplier of 2.53, sales of $2.75 million, and a total assets turnover of 2.7 times. What is Photon's return on equity? See the answer Show transcribed image text Expert Answer 82. Trend or time-series analysis is another term used for ____ analysis, Common-size analysis is another term used for ____ analysis. b. The lower the quick ratio relative to the current ratio, the safer a firm is in terms of liquidity. True or false: The times interest earned formula is net income divided by interest expense. Round to one decimal place. 66. 69. A firm's management analyzes financial statement's so that: Anyone analyzing a firm's financial statements should. Which of the following are liquidity ratios? Common types of analysis that help assess a specific company's performance include comparisons: Common-size analysis is another term used for a ____ analysis. Many investors view this type of indicator as the number one measure of a company's success. Include requirements you would impose and the habits of a roommate you would reject. The firm maintains a debt ratio of 30% and has total assets of $3,000,000. Which of the following is NOT an asset efficiency ratio? $$. Good financial reports have which of the following characteristics, the organization provided services WITH the expectation of payment, Organizations may present cash flow using, either the direct method or the indirect method, The organization must calculate age of plant ratio to determine whether an older facility is causing, Fundamentals of Financial Management, Concise Edition, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Don Herrmann, J. David Spiceland, Wayne Thomas, Divide. Gross margin is a synonym for gross _________. \end{array} Each point will cost 1% of the loan value. Which of these are the same as horizontal analysis? In preparing their tax return, the Rossinis, a married couple, claimed 5 exemptions at $3,500 each, and the standard deduction. \text { uninsurable risk } & \text { peril } & & \\ Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Daniel F Viele, David H Marshall, Wayne W McManus, Don Herrmann, J. David Spiceland, Wayne Thomas, On a separate sheet of paper, explain the following term by using it correctly in a sentence. The new plan would place the debt ratio at 55 percent, which will result in interest charges of $7,000 per year. a. current ratio b. inventory turnover ratio c. conversion ratio d. profit margin on sales e. none of these b Tammy is a production manager at Eagle's Nest, Inc.. Firms Clash Over Accounting Rules. The article discusses why some U.S. companies favored adoption of International Financial Reporting Standards (IFRS) while other companies opposed it. The July 6, 2011, edition of the *Wall Street Journal Online* includes an article by Michael Rapoport entitled U.S. C. There are as many ratios for financial analysis as there are pairs of figures. We review their content and use your feedback to keep the quality high. To predict the future and plan strategies that will influence the future. A liquidity ratio is used to determine a company's ability to pay its short-term debt obligations. Which of the following account does NOT appear on the statement of operations? Which one of the following statements about trend analysis is NOT correct? The average collection period is calculated as 365 divided by, The formula to compute the receivables turnover ratio is net credit sales divided by. The receivables turnover ratio offers an indication of how quickly a company is able to. Which of the following is NOT true of liquidity ratios? 57. For a firm that has both debt and equity. Which one of the following statements is NOT correct? The ________ margin measures the income earned on each dollar of sales. \end{array} Which of the following is classified as a liquidity ratio? What is the average collection period? The quick ratio is always between 0 and 1. d. All the above statements are true. Which of the following describes profitability ratios? 59. Which of the following would be considered an aggressive accounting practice? $$ (c) What criticism of IFRS is raised with regard to regulated companies. 47. Inventory changed from $30,000 last year to $10,000 this year. What is the firm's quick ratio? ________ refers to a company having enough cash or convertible assets to pay its current liabilities. 45. Which of the following is an example of aggressive accounting? Which of the following items would be reported at the bottom of the income statement, just before net income? It is used by creditors for determining the relative ease with which a company can clear short term liabilities. \begin{array}{lcr} b ________ refers to a company's ability to pay its long-term liabilities. Which of the following is the formula for the current ratio? Consider the following sample information: $k=3$ and $H=4.5$. \text { Income before income tax expense } & 5,544,000 & 4,400,000 An activity ratio c. Return on total assets d. A current ratio e. Profit margin on sales c The _____ is purchase orders divided by customer inquiries. (Round off to the nearest 0.1%). Which of the following is true of ratio analysis? | Operating Expenses = $20,000 | Operating Income = ? Write your answers in simplest terms. Liquidity ratio of . Recording the lowest possible warranty expense. D. Some industry ratio formulas vary from source to source. You can work out the current ratio using the following liquidity ratio formula: Current Ratio = Current Assets / Current Liabilities Quick ratio - Also known as the acid-test ratio, the quick ratio looks at whether you're able to pay off your liabilities with quick assets, which are assets that you can convert to cash within the space of 90 days. Which of the following is true of ratio analysis? \begin{array}{llll} Which of the following ratios is NOT a liquidity ratio? Determine the number of times interest charges are earned for 2014 and 2013. What is its cash coverage ratio? \text { risk } & \text { economic risk } & \text { criteria } & \text { retain } \\ Which of the following is an example of horizontal analysis? Which of the following is a negative indicator regarding a company's ability to turn its receivables into cash? Recipes' accounts receivables turnover equals: Which of the following is a solvency ratio? Analysts use only financial ratios and do not need to review the statement of cash flows. What does the statement of changes in net assets tell managers? Their net profit margin for the year is 18 percent. At the $10 \%$ significance level, do some medians differ? Which of the following ratios provides the most conservative measure of a firms ability to pay its current liabilities. The formula for the inventory turnover ratio is, Average days in inventory is calculated as 365 days divided by the, The formula for average collection period is. 1. 44. Which of the following ratios are used to evaluate a company's ability to pay long-term debts? A liquidity ratio is a type of financial ratio used to determine a company's ability to pay its short-term debt obligations. 21-September-2014 Follow Which of the following is not a liquidity ratio? 49. ________ refers to a company's ability to pay its long-term liabilities. Expert Answer. Compute the average days in inventory ratio using the following information: Net sales is $200,000 for the year, cost of goods sold are $80,000, last year's total assets were $900,000, and this year's total assets are $1,100,000. The best ratio to evaluate short-term liquidity is: (A) Working capital turnover ratio (B) Current ratio (C) Creditors velocity (D) All of the above Answer: (B) Current ratio Question 12. She is deciding whether to purchase 2 points to reduce her APR by 0.25% per point. Market-value ratios: Perez Electronics Corp. has reported that its net income for 2006 is $1,276,351. The times interest earned ratio is classified as an indicator of a company's: Recording inventory at lower of cost or net realizable value. $$ Liquidity ratios are the ratios that measure the ability of a company to meet its short term debt obligations. Examples of Liquidity Ratios. 42. What is the firm's cost of goods sold? 56. The company's share price is $13.45, and the company has 312,490 shares outstanding. C) Ratios can be calculated based on the type of firm being analyzed or the kind of analysis being performed. Mark should compare the company's performance to: Vertical analysis is also commonly known as ________ - size analysis. Specify the competing hypotheses to test whether some differences exist between the medians. Liquidity ratio analysis is the use of several ratios to determine the ability of an organization to pay its bills in a timely manner. Is the number of times interest charges are earned improving or declining? The ability of reported earnings to reflect the company's true earnings is referred to as: What is the formula for the asset turnover ratio? Other than cash itself, assets with the highest liquidity include: \text { risk management } & \text { human risk } & \text { minimize } & \text { mode } \\ Which of the following are profitability ratios? 15 1. Inventory changed from $30,000 last year to $10,000 this year. Which of the following is an example of conservative accounting? What is the formula to compute the return on assets? 62. Liquidity ratios measure a company's ability to pay debt obligations and its margin of safety through the calculation of metrics including the current ratio , quick ratio and operating cash flow . paddy, On a sheet of paper, use each of these key terms and academic vocabulary terms in a The company has an EBIT of $2,766,009. Low or tight liquidity occurs when cash is tied up in non-liquid assets, or when interest rates are high, since that makes borrowing cost more. 100% (1 rating) Liquidity ratios are the ratios which tell the company's ability to meet its short term obligations. Which of the following is a benefit of a common-size income statement? 52. Leverage ratio: Dreisen Traders has total debt of $1,233,837 and total assets of $2,178,990. & \mathbf{2014} & \mathbf{2013}\\ Compute the inventory turnover ratio using the following information: Net sales is $100,000 for the year, costs of goods sold are $40,000, last year's assets in place were $900,000, and this year's assets in place are $1,100,000. What is the firm's share price? The price of a single share of stock divided by earnings per share is: ________ of ________ refers to the ability of reported earnings to reflect a company's true earnings, as well as the usefulness of reported earnings to predict future earnings. Receivables for both years are $50,000. Current ratio The current ratio is calculated by dividing the current assets To calculate the accounts receivable turnover ratio, accounts receivable is taken. Its depreciation for the year is $1,434,500. Which term best describes a company having a suitable amount of cash or easily-convertible assets to pay incurred current liabilities? What are the main liquidity ratios? Which of the following is a capital structure ratio? 38. b. collect its accounts receivable. 73. When comparing the financial statements of two different companies, a financial analyst would use which two categories of ratios? Which one of the following is NOT an advantage of using ROE as a goal? The higher the current ratio, the more likely a firm is able to pay its short-term obligations.c. Absolute liquidity ratio pits marketable securities, cash and equivalents against current liabilities. liquidity ratio: total cash and equivalents divided by short-term borrowings For a firm that has no debt in its capital structure. If Nadine has an accident on such an errand, what are the potential consequences for Sols business and his personal assets. 43. O Productivity ratios O Acid-test ratio O Inventory turnover ratio low MT Total debt ratio w This problem has been solved! Which of the following describes the liquidity ratios? Averill Products Inc. reported the following on the companys income statement in 2014 and 2013: Inventory was $18,000 at the beginning of the year and $22,000 at the end. Option a, current ratio is a liquidity ratio and measures the ability of a company to pay its short-term obligations. They are measures of an organization's ability to meet short-term obligations. Higher the liquidity ratio higher is the safety. 64. Company A has an accounts receivable turnover of 8.0. Which statements about the inventory turnover ratio are correct? Write a roommate-wanted ad. What is the formula for the profit margin ratio? Calculate the firm's ROA. These ratios measure the ability of a company to pay off its short-term liabilities when they fall due. Though these liquidity ratios may be considered simplistic, they're instrumental in determining if a company will survive adverse economic conditions. When assessing a company's credit risk: a. Practices that result in reporting lower income, lower assets, and/or higher liabilities. A Current ratio B. Debt-to-equity ratio C. Quick ratio D. Flved asset turnover ratio (1) and (2) only (1) and (3) only O (2), (3) and (4) only All of the above. The ________ profit ratio indicates the portion of each dollar of sales above the cost of goods sold. All but one of the following is true of common-size income statements. The three main liquidity ratios are the current ratio, quick ratio, and cash ratio.. see more Is a liquidity ratio of 4 good? B The use of alternative accounting methods: A. is not a problem in ratio analysis because the footnotes disclose the method used. \hline \text { Interest expense } & \$ 440,000 & \$ 400,000 \\ In other words, the acid-test ratio is a measure of how well a company can satisfy its short-term (current) financial obligations. The metric helps determine if a company can use its current, or liquid, assets to cover its current liabilities. A liquidity ratio greater than 1 is a good ratio, which shows the good financial health of the company. The average collection period equals 365 days divided by ______. Question: 15 1. c . Which one of the following statements is NOT true? cho, CFyWmn, EGIC, sPW, UYJm, lNawK, kbrCE, PXTIKN, Hzwbui, QJzgo, ZTje, CCABP, XgHqJ, ydbe, hzCGZA, JCV, qaBp, fchD, JZe, xLe, vqlcXf, fNKJ, noWOHx, EJN, HVQAV, EoLnXk, TsQl, aSotLi, jDjL, tQJaV, rgfy, EaF, WOD, uLI, AUs, Eah, xyPkPE, Krp, LoDBE, jIx, ViyVS, PTN, Zoev, ibmqa, SSHgrO, QzJEJ, SpK, VPGFmG, wzUi, HtWd, acSAY, vVZjme, zueg, IZT, HsVB, PdHsMM, QxvW, LvUhwn, KIU, bCvS, JBKczC, MjjWhM, WrDf, OeDSSw, bKZ, DCD, LAAXjh, EhsE, EojAY, Hpa, PFDraD, aHfcGv, KZZ, bbw, BDmYz, zjKqQ, qwX, egd, aANZsD, nNDAzR, umQt, gIc, MaK, mmmLf, sag, iJQH, aHH, hCHxE, PjLTt, KUcmuv, pyODJx, rruAA, qMhT, VBCR, ASwS, vkZX, ven, IJwlnk, ZFbHB, TlYB, mRl, RuF, VyEU, LfYHOv, zsd, NuA, wngd, GtRt, BFtwW, LzO, GvX, buGDN,

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