The two basic measures of liquidity are a inventory turnover and current ratio

The two basic measures of liquidity are a inventory

  • Far Eastern University
  • IABF 13
  • Test Prep
  • John.Arvi
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59.The two basic measures of liquidity are(a)inventory turnover and current ratio.(b)current ratio and quick ratio.(c)gross profit margin and ROE.(d)current ratio and total asset turnover.Answer: BLevel of Difficulty: 2Learning Goal: 3Topic: Liquidity Analysis60.The _________ is a measure of liquidity which excludes _________, generally the least liquid asset.61.The _________ ratio may indicate the firm is experiencing stockouts and lost sales.
Chapter 2Financial Statements and Analysis7862.The _________ ratio may indicate poor collections procedures or a lax credit policy.63.ABC Corp. extends credit terms of 45 days to its customers. Its credit collection would be considered poor if its average collection period was(a)30 days.(b)36 days.(c)47 days.(d)57 days.Answer: DLevel of Difficulty: 2Learning Goal: 3Topic: Activity Analysis64.Which of the following ratios is difficult for creditors of a firm to analyze because the data are usually not available in published financial statements?65._________ are especially interested in the average payment period, since it provides them with a sense of the bill-paying patterns of the firm.
79Gitman •Principles of Finance,Eleventh Edition66.A firm has a current ratio of 1; in order to improve its liquidity ratios, this firm might

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