What does the current ratio measure?a) Liquidityb) Profitabilityc) Leveraged) Cash Flow

b) ProfitabilityINCORRECT• The current ratio shows the long-term solvency of the business. • It…

Answered: What does the current ratio measure? a)…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter24: Analysis Of Financial Statements

Section: Chapter Questions

Problem 5MC

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Which one of the following methods is based on net profit rather than cash flows? a. net present value b. payback c. internal rate of return d. accounting rate of return e. profitability index
Liquidity. The net profit / sales percentage measures which of the following? O Return on investment. O Risk. Profitability.
Based on the Liquidity ratio, which ratio determine stability, earning power and capital? Explain the formula and its impact & importance. Choose one only.
a. What is debt management ratio? b. What is profitability ratio?
Explain price/cash flow ratio
Which of the following is NOT a profitability ratio? Select one:a. Return on Equityb. Net Profit Marginc. Return on Assetsd. Average Collection Period
How is the impact of uncertainty reflected in a discounted cash flow (DCF) analysis?a) Debt/equity mixb) Discount ratec) Income tax rated) Interest coverage ratio
VII. Direction: Compute and interpret. The following comparative financial statements are provided by Avatar Industries. You were asked to compute the different financial ratios and provide your interpretations with regards to profitability, efficiency, liquidity and solvency of the company. Use the Answer Sheet template below to input your answer and solution. AVATAR INDUSTRIES AVATAR INDUSTRIES Comparative Statement of Financial Position For the years 2019 and 2018 Comparative Income Statement For the years 2019 and 2018 2019 2018 2019 2018 ASSETS Current Assets: Sales P200,000 P210,000 Cash & Cash Equivalent P65,000 P70,000 Sales Returns and Allowances 40,000 25,000 Accounts Receivable 40,000 35,000 Net Sales 160,000 185,000 Marketable Secuities 40,000 35,000 Cost of Goods Sold 100,000 115,625 Inventory 100,000 80,000 Gross Profit 60,000 69,375 Total Current Assets 220,000 200,000 160,000 P445,000 P380,000 245,000 Operating Expenses: Fixed Assets Selling Expenses 22,000 25,000 Total…
Which of the following is an idicator of financial risk ? a) Net Sales / Total Assets b) Total Liabilities / Equity c) Return on Assets d) Return on Equity
The return on assets ratio is a: Liquidity ratio. Solvency ratio. Profitability ratio. Market indicator ratio. O None of the above
Explain the difference between: a) Cash Flows versus Accounting Estimates b) Static Payback Period versus Dynamic Payback Period c) Absolute Profitability versus Relative Profitability
what are liquidity ratios, leverage ratios, profitability ratios, and market measure ratios?

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What does the current ratio measure? a) Liquidity b) Profitability c) Leverage d) Cash Flow