The liquidity ratios of the business are computed to know the short-term liquidity position of the business so that the capacity of paying the short-term liabilities can be identified. The same is computed and determined through the current ratio and acid-test ratio. The solvency ratios suggest the long-term solvency position of the business by taking into consideration the capital structure in which the finances have been employed. The same is determined through the debt-equity ratio and times interest earned. The profitability ratios suggest the earning capacity of the business in terms of profit margin based on sales revenue and return on total assets based on total assets of the business. : Classification of various ratios under Liquidity, Solvency, Profitability and Market prospects.

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Answer 1

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Chapter 13, Problem 1E

To determine

Introduction:The liquidity ratios of the business are computed to know the short-term liquidity position of the business so that the capacity of paying the short-term liabilities can be identified. The same is computed and determined through the current ratio and acid-test ratio.

The solvency ratios suggest the long-term solvency position of the business by taking into consideration the capital structure in which the finances have been employed. The same is determined through the debt-equity ratio and times interest earned.

The profitability ratios suggest the earning capacity of the business in terms of profit margin based on sales revenue and return on total assets based on total assets of the business.

:

Classification of various ratios under Liquidity, Solvency, Profitability and Market prospects.

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Answer 2

Question

Chapter 13, Problem 1E

To determine

Introduction:The liquidity ratios of the business are computed to know the short-term liquidity position of the business so that the capacity of paying the short-term liabilities can be identified. The same is computed and determined through the current ratio and acid-test ratio.

The solvency ratios suggest the long-term solvency position of the business by taking into consideration the capital structure in which the finances have been employed. The same is determined through the debt-equity ratio and times interest earned.

The profitability ratios suggest the earning capacity of the business in terms of profit margin based on sales revenue and return on total assets based on total assets of the business.

:

Classification of various ratios under Liquidity, Solvency, Profitability and Market prospects.

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Answer 3

Question

Chapter 13, Problem 1E

To determine

Introduction:The liquidity ratios of the business are computed to know the short-term liquidity position of the business so that the capacity of paying the short-term liabilities can be identified. The same is computed and determined through the current ratio and acid-test ratio.

The solvency ratios suggest the long-term solvency position of the business by taking into consideration the capital structure in which the finances have been employed. The same is determined through the debt-equity ratio and times interest earned.

The profitability ratios suggest the earning capacity of the business in terms of profit margin based on sales revenue and return on total assets based on total assets of the business.

:

Classification of various ratios under Liquidity, Solvency, Profitability and Market prospects.

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Answer 4

Question

Chapter 13, Problem 1E

To determine

Introduction:The liquidity ratios of the business are computed to know the short-term liquidity position of the business so that the capacity of paying the short-term liabilities can be identified. The same is computed and determined through the current ratio and acid-test ratio.

The solvency ratios suggest the long-term solvency position of the business by taking into consideration the capital structure in which the finances have been employed. The same is determined through the debt-equity ratio and times interest earned.

The profitability ratios suggest the earning capacity of the business in terms of profit margin based on sales revenue and return on total assets based on total assets of the business.

:

Classification of various ratios under Liquidity, Solvency, Profitability and Market prospects.

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Answer 5

Chapter 13, Problem 1E

To determine

Introduction:The liquidity ratios of the business are computed to know the short-term liquidity position of the business so that the capacity of paying the short-term liabilities can be identified. The same is computed and determined through the current ratio and acid-test ratio.

The solvency ratios suggest the long-term solvency position of the business by taking into consideration the capital structure in which the finances have been employed. The same is determined through the debt-equity ratio and times interest earned.

The profitability ratios suggest the earning capacity of the business in terms of profit margin based on sales revenue and return on total assets based on total assets of the business.

:

Classification of various ratios under Liquidity, Solvency, Profitability and Market prospects.

Answer 6

Chapter 13, Problem 1E

To determine

Introduction:The liquidity ratios of the business are computed to know the short-term liquidity position of the business so that the capacity of paying the short-term liabilities can be identified. The same is computed and determined through the current ratio and acid-test ratio.

The solvency ratios suggest the long-term solvency position of the business by taking into consideration the capital structure in which the finances have been employed. The same is determined through the debt-equity ratio and times interest earned.

The profitability ratios suggest the earning capacity of the business in terms of profit margin based on sales revenue and return on total assets based on total assets of the business.

:

Classification of various ratios under Liquidity, Solvency, Profitability and Market prospects.

Answer 7

Chapter 13, Problem 1E

To determine

Introduction:The liquidity ratios of the business are computed to know the short-term liquidity position of the business so that the capacity of paying the short-term liabilities can be identified. The same is computed and determined through the current ratio and acid-test ratio.

The solvency ratios suggest the long-term solvency position of the business by taking into consideration the capital structure in which the finances have been employed. The same is determined through the debt-equity ratio and times interest earned.

The profitability ratios suggest the earning capacity of the business in terms of profit margin based on sales revenue and return on total assets based on total assets of the business.

:

Classification of various ratios under Liquidity, Solvency, Profitability and Market prospects.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 13 - Prob. 1MCQ Ch. 13 - Prob. 2MCQ Ch. 13 - Prob. 3MCQ Ch. 13 - Prob. 4MCQ Ch. 13 - Prob. 5MCQ Ch. 13 - Prob. 1DQ Ch. 13 - Prob. 2DQ Ch. 13 - Prob. 3DQ Ch. 13 - Prob. 4DQ Ch. 13 - Prob. 5DQ

Solution Summary: The author explains the classification of various ratios under Liquidity, Solvency, Profitability, and Market Prospects.

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