Which One of the Following Is Not a Liquidity Activity

question 104

Multiple Choice

Which one of the following is not a liquidity activity ratio?

• A) inventory turnover ratio
• B) time interest earned ratio
• C) days to collect receivables ratio
• D) days to sell inventory ratio

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Definitions:

Principal-Agent Relationship

A legal relationship where one party (the agent) acts on behalf of another party (the principal) in business transactions.

Power to Bind

The authority granted to an agent or representative to enter into contracts or agreements that legally bind the principal to the terms.

Contract

An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable by law.

Right to Control

The authority or power to regulate, direct, or command something or someone's actions or decisions.