Which of the Following Ratios Measure How Efficiently a Firm

question 68

Multiple Choice

Which of the following ratios measure how efficiently a firm uses its assets, as well as how efficiently the firm manages its accounts payable?

• A) asset management
• B) cash
• C) internal-growth
• D) quick or acid-test

---

Definitions:

Administrative Expenses

Administrative Expenses are overhead costs not directly tied to a specific function such as manufacturing, production, or sales, and can include salaries, rent, and office supplies.

Budgeting

A financial planning process whereby individuals or entities estimate their expected incomes and expenditures over a defined period.

Activity Variance

Activity variance calculates the difference between the planned quantity of activity and the actual quantity, analyzing the impact on costs and operational efficiency.

Direct Labor

The wages and benefits paid for the labor directly involved in the production of goods or services.