Select one:
True
False

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Correct. The only difference between the two ratios is the elimination of inventory in the
numerator.
Liquidity ratios indicate a company's short-term debt-paying ability. These ratios include: (Select
all that apply). Each incorrect answer results in a negative point mark.
Select one or more:
a. Number of days' sales in accounts receivable.
This is open for debate. While your textbook marks this as a liquidity ratio, other sources do not.
Therefore, there is no positive nor negative mark for checking this answer.
b. Stock Value to Sales ratio.
c. Inventory turnover.
This is open for debate. While your textbook marks this as a liquidity ratio, other sources do not.
Therefore, there is no positive nor negative mark for checking this answer.
d. Equity ratio.
e. Accounts receivable turnover.
This is open for debate. While your textbook marks this as a liquidity ratio, other sources do not.
Therefore, there is no positive nor negative mark for checking this answer.
f. Current ratio.
g. Cash ratio, aka as cash flow liquidity ratio.
h. Quick ratio, aka as acid-test ratio.
i. Total assets turnover.
This is open for debate. While your textbook marks this as a liquidity ratio, other sources do not.
Therefore, there is no positive nor negative mark for checking this answer.
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The correct answers are: Current ratio., Quick ratio, aka as acid-test ratio., Cash ratio, aka as cash
flow liquidity ratio.
Question 2
Correct
Mark 10.00 out of 10.00
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Question text
Profitability ratios are an important measure of a company's operating success. These tests
include(Mark all that apply). Each incorrect answer results in a negative point mark.
Select one or more:
a. Acid-test (quick) ratio.
b. Times interest earned ratio.
This is open for debate. While your textbook marks this as a profitability ratio, other sources do
not. Therefore, there is no positive nor negative mark for checking this answer.
c. Times preferred dividends earned ratio.
This is open for debate. While your textbook marks this as a profitability ratio, other sources do
not. Therefore, there is no positive nor negative mark for checking this answer.
d. Return on sales, aka Net Profit Margin Percentage, aka Net income to net sales.
e. Return on assets.
f. Earnings per share of common stock.
This is open for debate. While your textbook marks this as a profitability ratio, other sources do
not. Therefore, there is no positive nor negative mark for checking this answer.
g. Inventory turnover.