Which of the Following Ratios Is Used to Evaluate a Company's

question 54

Multiple Choice

Which of the following ratios is used to evaluate a company's liquidity?

• A)Debt to assets ratio.
• B)Asset turnover ratio.
• C)Return on equity ratio.
• D)Current ratio.

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Definitions:

Allocative Efficiency

A condition of distributing resources in which improving the situation of one person necessitates the detriment of another.

Long-Run Equilibrium

A state in which all factors of production can be adjusted, markets clear, and no economic agents have the incentive to change their behavior.

Marginal Revenue

The additional income that a business receives from selling one more unit of a good or service.

Economic Profits

The difference between total revenues and total costs, including both explicit and implicit costs.