The Financial Ratio That Measures How Well the Managers of the Organization

question 20

Multiple Choice

The financial ratio that measures how well the managers of the organization are creating value from the organization's assets is the ________ ratio.

• A)leverage
• B)liquidity
• C)current
• D)activity

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Definitions:

Operating Cycle

The duration of time from the acquisition of goods for resale or the start of a service to the receipt of payment from customers.

Cash Cycle

The period between the outlay of cash for raw materials and receiving payment from customers, reflecting the efficiency of a company's cash flow management.

Quarterly Receipts

Refers to the income or revenue received by a business, organization, or government on a quarterly basis.

Quarterly Disbursements

The act of paying out or distributing company funds, typically dividends or investments, on a quarterly basis.