Which One of the Following Ratios Is a Test of a Company's

question 25

Multiple Choice

Which one of the following ratios is a test of a company's short-term debt-paying ability?

• A)profit margin
• B)price/earnings
• C)acid-test
• D)times interest earned

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Definitions:

Fair Insurance Policy

An insurance contract that is considered equitable, offering reasonable terms, coverage, and protection for all parties involved.

Premium

The amount paid for an insurance policy or the difference above the nominal or face value of a security.

Expected Value

The predicted value of a variable, calculated as a sum of all possible values each multiplied by the probability of its occurrence.

Insurance Policy

A contractual agreement between an individual or entity and an insurance company, outlining the terms for the insurer to compensate the insured for specific losses in exchange for premiums paid.