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.
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.
举一反三
- The current ratio is used to evaluate a firm's ability to pay its short-term debts.
- The debt ratio indicates: A: a.the ability of the firm to pay its current obligations B: b.the efficiency of the use of total assets C: c.the magnification of earnings caused by leverage D: d.a comparison of liabilities with total assets
- The current ratio is measured as: A: current assets minus current liabilities. B: current assets divided by current liabilities. C: current liabilities minus inventory, divided by current assets. D: cash on hand divided by current liabilities. E: current liabilities divided by current assets.
- The quick ratio is measured as: A: current assets divided by current liabilities. B: cash on hand plus current liabilities, divided by current assets. C: current liabilities divided by current assets, plus inventory. D: current assets minus inventory, divided by current liabilities. E: current assets minus inventory minus current liabilities.
- The greater the level of current assets available relative to liabilities, the greater the firm’s ______ .