Quiz%20-%20Performance

Quiz%20-%20Performance - 4. The larger the Accounts...

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Performance – True or False Questions 1. The difference between the current and quick (acid test) ratios can give an indication of how much inventory a firm is carrying. 2. The difference between the gross profit and the operating profit gives an indication of how much a firm is spending on overhead (selling, general and administrative expenses). 3. Times Interest Earned is an indicator of a firm's ability to service its debt.
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Unformatted text preview: 4. The larger the Accounts Receivable Turnover ratio, the longer it is taking for a firm to receive payment from its customers. 5. When looking at an income statement, it is a good idea to convert actual dollar figures to a % of sales in order to compare the relative value of expenses over time....
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This note was uploaded on 10/12/2011 for the course ECON 101 taught by Professor Mikson during the Spring '08 term at Aarhus Universitet.

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