Which of the Following Ratios Measures a Firm's Ability to Meet

question 50

Multiple Choice

Which of the following ratios measures a firm's ability to meet its current debt obligations?

• A) Short-term solvency ratio
• B) Long-term solvency ratio
• C) Profitability ratio
• D) Activity ratio
• E) Equity ratio

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Definitions:

Elton Mayo

A pioneering researcher in industrial human relations who led the Hawthorne Studies, which highlighted the importance of social factors in the workplace such as employee morale and productivity.

Productive Efficiency

A situation where an economy or firm produces goods or services at the lowest possible cost, often achieved by fully utilizing all available resources.

Pareto Analysis

A statistical technique used in decision making that is based on the principle that 80% of effects come from 20% of causes, often used to prioritize tasks.

80/20 Rule

A principle stating that 80% of effects come from 20% of causes, often used to highlight the importance of focusing on the most productive inputs.