Financial Accounting mcq type Question Which ratio measures a company's ability to payits short-term obligations?a) Debt-to-equity ratiob) Return on assetsc) Current ratiod) Gross profit margin

Explanation of Current Ratio: The current ratio is a fundamental liquidity measure that shows a…

Answered: Which ratio measures a company's…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 19MCQ

See similar textbooks

Similar questions

Which of the following ratios is used to measure a firms profitability? a. Liabilities Ă· Equity c. Sales Ă· Assets b. Assets Ă· Equity d. Net Income Ă· Net Sales
Calculate the projected debt ratio, debt-to-equity ratio, liabilities-to-assets ratio, times-interest-earned ratio, and EBITDA coverage ratios. How does Computron compare with the industry with respect to financial leverage? What can you conclude from these ratios?
Which financial ratio measures a company's ability to pay its short-term obligations? a) Debt-to-equity ratio b) Current ratio c) Return on investment d) Gross profit margin
Which of the following ratios is used by the company to determine its ability to pay currently maturing obligations? a. Cash Ration b. Interest Coverage Ratio c. Equity Ratio d. Accounts Receivable turnover
Which of the following ratios best measures the profitability of a company? a) Return on equity b) Gross margin c) Current ratio d) Net operating asset turnover
A ratio that measures a company’s profitability is thea. leverage ratio.b. gross margin percentage.c. current ratio.d. times-interest-earned ratio.
Which of the following financial measures are used to determine a company's credit rating? a)A company's current ratio, quick ratio, inventory turnover ratio, and default risk ratio b) Its ratio of annual interest payments to net profits, current ratio, working capital ratio, debt-equity ratio, and percentage return on capital employed c) Its loans outstanding as a percentage of total revenues, default risk ratio, inventory turnover ratio, and long-term debt-to-equity ratio d) Its total debt-equity ratio, current ratio, working capital ratio, and ratio of prior-year cash flow from operations to prior-year interest payments e) The percentage by which prior-year cash flow from operations covers a company's prior-year interest payments, the company's debt-asset ratio, its dividend payout ratio, and its default risk ratio
Profit volume ratio is similar to which of the following ratios? Debtors' turnover ratio Operating Ratio Current ratio Net profit ratio
Which of the following ratios is used to analyze a company's liquidity? a. Inventory turnover ratio b. Earnings per share c. Return on assets ratio d. Asset turnover ratio
Long-term solvency is indicated by a. Current ratio b. Debt/equity ratio c. Operating ratio d. Net profit ratio
Total debt-to-assets ratio, debt-to-equity ratio and Long-term debt-to-capital ratio are examples of what type or category of ratios? a. Activity O b. Profitability O c. Liquidity O d. Leverage
The current ratio: a. Is used to help assess a company's ability to pay its debts in the near future. b. Measures the effect of operating income on profit. c. Is used to measure the relationship between assets and long-term debt. d. Is used to measure a company's collection period.

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Financial Accounting

Accounting

ISBN:

9781337272124

Author:

Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Financial Accounting

Accounting

ISBN:

9781337272124

Author:

Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

Financial And Managerial Accounting

Accounting

ISBN:

9781337902663

Author:

WARREN, Carl S.

Publisher:

Cengage Learning,

College Accounting, Chapters 1-27

Accounting

ISBN:

9781337794756

Author:

HEINTZ, James A.

Publisher:

Cengage Learning,

SEE MORE TEXTBOOKS

Which ratio measures a company's ability to pay its short-term obligations? a) Debt-to-equity ratio b) Return on assets c) Current ratio d) Gross profit margin