Which of the Following Ratios Would Be of Primary Importance

question 35

Multiple Choice

Which of the following ratios would be of primary importance to a supplier in deciding to extend credit for goods delivered?

• A)Earnings per share
• B)Debt/equity ratio
• C)Accounts receivable turnover
• D)Quick ratio

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Definitions:

Facility Costs

Expenses related to the physical buildings and property necessary for a company to conduct its business, including rent, utilities, and maintenance.

Overhead Cost Application

The process of distributing overhead costs to specific cost objects such as products, services, or departments based on a chosen allocation base.

Traditional Costing Systems

Costing methods that allocate manufacturing overhead costs to products based on a single measure of activity, such as direct labor hours.

Activity Information

Data related to specific actions or operations within a company, used to analyze performance or make decisions.