If a Company's ________ Ratio Skyrockets or Plummets Versus Industry

question 3

Multiple Choice

If a company's ________ ratio skyrockets or plummets versus industry averages, then cash (and other short-term assets) must be managed.

• A) leverage
• B) profitability
• C) current
• D) asset turnover
• E) activity

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Definitions:

Material Effect

A significant impact or change to a business or financial situation, often requiring disclosure to stakeholders.

Agreement

An understanding or arrangement reached between two or more parties, either formally or informally.

Enforce

Refers to the act of compelling observance or compliance with a law, rule, or obligation.

Contract

A legally binding agreement between two or more parties, enforcing obligations and rights in relation to the agreement.