Homework Answers
Ans. Option 2nd
Explanation: The word liquidity shows the ability to pay the short term obligations of a firm. Short term obligations can be defined as current liabilities.
When we calculate the liquidity ratios (current ratio or quick ratio), we need to use current liabilities as a denominator. That's why, we can say that liquidity measures the ability to pay current liabilities.
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Роле. Question 6 Liquidity of a company is generally defined as a measure of the ability...
Question 7 Which of the following statements is true? Liquidity ratios measure a company's long-term ability...
Which of the following statements is true? Liquidity ratios measure a company's long-term ability to pay debt. Solvency ratios measure a company's ability to repay current debt. A high liquidity ratio generally indicates that a company has a greater ability to meet its current obligations. Solvency ratios measure a company's ability to survive on a short-term basis.
Clear All Current ratio A measure of a company's ability to pay its short-term liabilities out...
Clear All Current ratio A measure of a company's ability to pay its short-term liabilities out of short-term assets Debt ratio A measure that compares only the most liquid assets to current liabilities Times-interest-earned ratio An income statement measure of the ability of a company to service its debts Quick ratio A measure of the degree of protection afforded creditors in case of insolvency Debt-to-equity ratio A ratio that indicates what proportion of equity and debt a company is using...
QUESTION ANSWER Which of the following is generally a FALSE statement for the current ratio analysis?...
QUESTION ANSWER Which of the following is generally a FALSE statement for the current ratio analysis? Current ratios measure the ability of the company to pay its Current Liabilities with Current Assets. Companies want a current ratio number below O O O OO A potential lender, such as a bank, might use the current ratio to predict if the business borrowing the money can repay. A business with a lot of debt (Liabilities) will have a higher current ratio. I...
36. The most common measure of short-term liquidity is the a. acid-test. b. current ratio. c....
36. The most common measure of short-term liquidity is the a. acid-test. b. current ratio. c. quick ratio. d. working capital. 37. The acid-test is calculated as Cash + Cash Equivalents + Accounts Receivable Current Liabilities Cash + Cash Equivalents + Inventory + Accounts Receivable Current Liabilities Cash + Cash Equivalents + Accounts Receivable Current Assets Cash + Cash Equivalents + Inventory + Accounts Receivable Current Assets 38. A high inventory turnover might signal a. a problem with old and...
Question 29 Not yet answered Marked out of 3.00 Flag question Question text Selected data from...
Question 29 Not yet answered Marked out of 3.00 Flag question Question text Selected data from Kamal Company's financial statements is as follows: In $000's 2017 2016 Current liabilities $ 5,130 $ 5,202 Long-term debt 1,419 1,322 Stockholders' equity 12,632 11,166 Interest and principal payments 300 400 Net income 2,430 2,280 Interest expense 196 172 Income taxes 1,837 1,524 Dividends paid 750 750 Kamal Company's times interest earned ratio for 2017 Select one: A. increased, which indicates the company's creditors...
E4-03B.Stat Question 6 Not complete Marked out of 4.00 P Flag question Evaluating he Liquidity and...
E4-03B.Stat Question 6 Not complete Marked out of 4.00 P Flag question Evaluating he Liquidity and Solvency of a Company Identify whether the following statements are true or false. a. The current ratio is a measure of a firm's solvency. b. The return on assets ratio is a measure of a firm's profitability. c. The profit margin is a measure of a firm's liquidity. d. The debt-to-total-assets ratio is a measure of a firm's solvency
Measures of liquidity, The ability of a company to make its periodic interest payments and repay...
Measures of liquidity, The ability of a company to make its periodic interest payments and repay the face amount of debt at maturity.Solvency, and The ability of a firm to generate earnings.Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 57 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 $4,485,650...
Possible Answers: Match each term or phrase to its description below. Liquidity Whether an item is...
Possible Answers:
Match each term or phrase to its description below. Liquidity Whether an item is large enough to likely influence the decision of an investor or creditor. Constraint that weighs the cost that companies will incur to provide the information against the benefit that financial statement users will gain from having the information available. Obligations that a company expects to pay within the next year or operating cycle, whichever is longer. Information that is complete, neutral, and free from...
This category of ratios considers a company's ability to produce returns from their operational performance: Liquidity...
This category of ratios considers a company's ability to produce returns from their operational performance: Liquidity Efficiency Solvency O Profitability Which of the following ratios measures how quickly cash is collected from customers sold to on credit? Current ratio O Quick ratio Accounts receivable turnover Times interest earned Question 8 (1 point) Analysis of one single number is of great value. True False Question 9 (1 point) Which of the following ratios shows the relationship of a businesses sources of...
What is the debt ratio in the below problem? 4.0 Liquidity, acid test and debt ratios...
What is the debt ratio in the below problem? 4.0 Liquidity, acid test and debt ratios The person in charge of the finances of the company MGT, S.A. wants to know the company's situation concerning the industrial sector to which it belongs. For this, it has the following information regarding the industry: General liquidity ratio is 1.55; the acid test is 1.20, and the ratio between the available and the current liabilities is 0.95. The debt ratio stands at 1.25....
Clear All Current ratio A measure of a company's ability to pay its short-term liabilities out of short-term assets Debt ratio A measure that compares only the most liquid assets to current liabilities Times-interest-earned ratio An income statement measure of the ability of a company to service its debts Quick ratio A measure of the degree of protection afforded creditors in case of insolvency Debt-to-equity ratio A ratio that indicates what proportion of equity and debt a company is using...
QUESTION ANSWER Which of the following is generally a FALSE statement for the current ratio analysis? Current ratios measure the ability of the company to pay its Current Liabilities with Current Assets. Companies want a current ratio number below O O O OO A potential lender, such as a bank, might use the current ratio to predict if the business borrowing the money can repay. A business with a lot of debt (Liabilities) will have a higher current ratio. I...
36. The most common measure of short-term liquidity is the a. acid-test. b. current ratio. c. quick ratio. d. working capital. 37. The acid-test is calculated as Cash + Cash Equivalents + Accounts Receivable Current Liabilities Cash + Cash Equivalents + Inventory + Accounts Receivable Current Liabilities Cash + Cash Equivalents + Accounts Receivable Current Assets Cash + Cash Equivalents + Inventory + Accounts Receivable Current Assets 38. A high inventory turnover might signal a. a problem with old and...
E4-03B.Stat Question 6 Not complete Marked out of 4.00 P Flag question Evaluating he Liquidity and Solvency of a Company Identify whether the following statements are true or false. a. The current ratio is a measure of a firm's solvency. b. The return on assets ratio is a measure of a firm's profitability. c. The profit margin is a measure of a firm's liquidity. d. The debt-to-total-assets ratio is a measure of a firm's solvency
Possible Answers:
Match each term or phrase to its description below. Liquidity Whether an item is large enough to likely influence the decision of an investor or creditor. Constraint that weighs the cost that companies will incur to provide the information against the benefit that financial statement users will gain from having the information available. Obligations that a company expects to pay within the next year or operating cycle, whichever is longer. Information that is complete, neutral, and free from...
This category of ratios considers a company's ability to produce returns from their operational performance: Liquidity Efficiency Solvency O Profitability Which of the following ratios measures how quickly cash is collected from customers sold to on credit? Current ratio O Quick ratio Accounts receivable turnover Times interest earned Question 8 (1 point) Analysis of one single number is of great value. True False Question 9 (1 point) Which of the following ratios shows the relationship of a businesses sources of...
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