Which of the Following Measures Would Assist in Assessing the Liquidity

question 31

Multiple Choice

Which of the following measures would assist in assessing the liquidity of a company?

• A)Return on equity.
• B)Fixed asset turnover ratio.
• C)Receivables turnover ratio.
• D)Times interest earned ratio.

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Definitions:

Insurable Interest

A principle requiring that a person purchasing insurance has a vested interest in the item or life being insured.

Double Chocolate Bars

Confectionery items that incorporate chocolate in at least two forms, such as chocolate coating and chocolate filling.

Confection Corporation

A business entity specialized in the production and sale of sweets and chocolates.

Perfect Tender Rule

A common law rule under which a seller was required to deliver to the buyer goods that conformed perfectly to the requirements stipulated in the sales contract. A tender of nonconforming goods would automatically constitute a breach of contract. Under the Uniform Commercial Code, the rule has been greatly modified.