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

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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
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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
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
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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
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
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

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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