ZuoTi.Pro
Question

Which of the following ratios are correctly described as liquidity and solvency ratios? Liquidity Solvency A....

Which of the following ratios are correctly described as liquidity and solvency ratios?

Liquidity Solvency
A. Cash Current
B. Current Debt to equity
C. Debt to equity Financial leverage

Group of answer choices

Row C

Row B

Row A

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Row B

Liquidity ratios show the position of the company to meet its short term liabilities. Short term liabilities which has maximum maturity period of 1 year. Solvency ratios show the position of the company to meet its long term liabilities. Long term liabilities which has maturity period of more than 1 year. Cash, Current are examples of liquidity ratio. Debt to equity and financial leverage are examples of solvency ratios.

0 0
Add a comment
Know the answer?
Add Answer to:
Which of the following ratios are correctly described as liquidity and solvency ratios? Liquidity Solvency A....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information for...

    Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information for Calpine Corporation for 2004 and 2006 follows. ($ millions) 2004 2006 Cash $ 1,256.73 $ 1,523.36 Accounts receivable 1,097.16 735.30 Current assets 3,313.56 3,268.33 Current liabilities 3,285.39 6,057.95 Long-term debt 17,150.81 3,531.63 Short-term debt 1,033.96 4,568.83 Total liabilities 22,898.42 25,503.17 Interest expense 1,516.90 1,288.29 Capital expenditures 1,545.48 211.50 Equity 4,587.67 (7,152.90) Cash from operations 19.89 335.98 Earnings before interest and taxes 1,659.84 1,907.84 (a)...

  • What is the equation to solve each below? Short term solvency, or liquidity, ratios Long-term solvency,...

    What is the equation to solve each below? Short term solvency, or liquidity, ratios Long-term solvency, or financial leverage, ratios Asset management, or turnover, ratios Profitability ratios Market value ratios Explain what problems financial statement analysis presents.

  • Which of the following would be considered liquidity or short-term solvency ratios? quick ratio; cash ratio....

    Which of the following would be considered liquidity or short-term solvency ratios? quick ratio; cash ratio. quick ratio; times interest earned ratio (TIE). current ratio; long-term debt ratio. current ratio; inventory turnover ratio;

  • E10-16 Calculate liquidity and solvency ratios; discuss impact of unrecorded obligations on liquidity and solvency. (LO...

    E10-16 Calculate liquidity and solvency ratios; discuss impact of unrecorded obligations on liquidity and solvency. (LO 7), AP Suppose McDonald's 2014 financial statements contain the following selected data (in millions). Current assets $ 3,416.3 Total assets 30,224.9 Current liabilities 2,988.7 Total liabilities 16,191.0 Interest expense $  473.2 Income taxes 1,936.0 Net income 4,551.0 Instructions 1. Compute the following values and provide a brief interpretation of each. A. Working capital. B. Current ratio. C. Debt to assets ratio. D. Times interest...

  • Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information for...

    Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information for Calpine Corporation for 2004 and 2006 follows. ($ millions) 2004 2006 Cash $ 1,256.73 $ 1,523.36 Accounts receivable 1,097.16 735.30 Current assets 3,313.56 3,268.33 Current liabilities 3,285.39 6,057.95 Long-term debt 17,150.81 3,531.63 Short-term debt 1,033.96 4,568.83 Total liabilities 22,898.42 25,503.17 Interest expense 1,516.90 1,288.29 Capital expenditures 1,545.48 211.50 Equity 4,587.67 (7,152.90) Cash from operations 19.89 335.98 Earnings before interest and taxes 1,659.84 1,907.84 (a)...

  • Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information for...

    Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information for Starbucks for 2018 and 2017 follows. ($ millions) Cash 2018 2017 $ 8,756.3 $2,462.3 181.5 228.6 Short-term investments Accounts receivable 693.1 870.4 Current assets 12,494.2 5,283.4 5,684.2 4,220.7 349.9 Current liabilities Short-term debt Long-term debt Total liabilities Interest expense Capital expenditures Equity Cash from operations Earnings before interest and taxes 9,090.2 3,932.6 22,980.6 8,908.6 170.3 92.5 1,976.4 1,519.4 1,175.8 5,457.0 11,937.8 4,251.8 3,883.3 4,134.7...

  • Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information for...

    Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information for Nordstrom, Inc. for 2016 and 2015 follows. ole ($ millions) 2016 2015 Cash $ 595 $ 827 Accounts receivable 196 2,306 Current assets 3,014 5,224 Current liabilities 2,911 2,800 Long-term debt 2,795 3,123 Short-term debt 10 8 Total liabilities 6,827 6,805 Interest expense 153 156 Capital expenditures 1,082 861 Equity 871 2,440 Cash from operations 2,451 1,220 Earnings before interest and taxes 1,101 1,323...

  • 11.Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information for...

    11.Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information for Calpine Corporation for 2004 and 2006 follows. ($ millions) 2004 2006 Cash $ 1,376.73 $ 1,503.36 Accounts receivable 1,097.16 735.30 Current assets 3,563.56 3,168.33 Current liabilities 3,285.39 6,057.95 Long-term debt 16,940.81 3,351.63 Short-term debt 1,033.96 4,568.83 Total liabilities 22,628.42 25,743.17 Interest expense 1,516.90 1,288.29 Capital expenditures 1,545.48 211.50 Equity 4,587.67 (7,152.90) Cash from operations 9.89 155.98 Earnings before interest and taxes 1,589.84 1,877.84 (a)...

  • 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.

  • 2021 was 50,000. Compute selected ratios, and compare liquidity, profitability, and solvency for two companies P15...

    2021 was 50,000. Compute selected ratios, and compare liquidity, profitability, and solvency for two companies P15.5 (LO 2) Selected financial data of Target (USA) and Wal-Mart Stores, Inc. (USA) for a recent year are presented below (in millions). Wal-Mart Target Stores, Inc. Corporation Income Statement Data for Year $476,294 358,069 91,353 $72,596 51,160 Net sales Cost of goods sold 16,816 Selling and administrative expenses Interest expense Other income (expense) Income tax expense 2,335 1,126 (410) 8,105 (391) 1,132 $ 16,022...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT