A. Average age of inventory + average collection period – average payment period. B. Average payment period – average age of inventory + average collection period. C. Average age of inventory + average payment period – average collection period. D. Operating cycle – Average age of inventories. 4. Which of the following does not describe a money market? A. Key securities traded are bonds and stocks. B. A market for debt securities with maturities of one year or less. C. Examples are Treasury bill and Bank of Botswana certificates. D. A financial relationship between supplier and demanders of short-term financing.
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
3. Which of the following is the correct formula for the cash conversion cycle?
A. Average age of inventory + average collection period – average payment period.
B. Average payment period – average age of inventory + average collection period.
C. Average age of inventory + average payment period – average collection period.
D. Operating cycle – Average age of inventories.
4. Which of the following does not describe a
A. Key securities traded are bonds and stocks.
B. A market for debt securities with maturities of one year or less.
C. Examples are Treasury bill and Bank of Botswana certificates.
D. A financial relationship between supplier and demanders of short-term financing.
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