If a firm's liquidity ratio is higher than industry average, it may indicate the firm has too many current assets.
举一反三
- A firm with a higher degree of operating leverage when compared to the industry average implies thatthe A: Firm has higher variable costs. B: Firm's profits are more sensitive to changes in sales volume. C: Firm is more profitable. D: Firm is less risky.
- Haley and Ethan own a small business and they are determining the firm’s assets. The amount of money in their checking account balance would be counted as __________. A: liquidity B: fixed assets C: current assets D: earnings before interest and taxes (EBIT)
- The purpose of the current ratio is to evaluate the firm's ability to A: generate sales with a given level of current assets. B: utilize current assets profitably. C: pay its bills in the short run. D: effectively use borrowed funds.
- 中国大学MOOC: A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firm’s average variable cost but greater than the firm’s average fixed cost.
- For the same firm, the current ratio is always larger than quick ratio.