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

Provide answer

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

Financial Accounting mcq type Question

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

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

Which of the following ratios measures short-term solvency? a. Current ratio b. Creditors' equity to total assets c. Return on investment d. Total asset turnover

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.

What financial metric measures a company's ability to cover its short-term obligations with its most liquid assets and is calculated by excluding inventory from the current assets? A. Quick ratio B. Current ratio C. Inventory turnover ratio D. Return on assets ratio

Describe how the times interest earned ratio is used to evaluate a company’s financial condition.