A Relationship of One Number to Another Is a Ratio

question 2

True/False

A relationship of one number to another is a ratio.

---

Definitions:

Acid-test Ratio

A liquidity metric that measures a company's ability to pay off its current liabilities with its most liquid assets, without relying on the sale of inventory.

Times Interest

Likely refers to the "Times Interest Earned Ratio" or "Interest Coverage Ratio," which measures a company's ability to meet its interest obligations from earnings.

Debt-to-equity Ratio

A ratio that reflects the mix of debt and equity used to finance a company's assets.

Equity Multiplier

The equity multiplier is a financial ratio that measures the proportion of a company's total assets financed by its shareholders' equity.