Which of the Following Ratios Would Generally Be Used to Evaluate

question 59

Multiple Choice

Which of the following ratios would generally be used to evaluate a firm's overall liquidity position?

• A)Working capital
• B)Current ratio
• C)Acid-test ratio
• D)Cash ratio
• E)Inventory turnover in days

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Definitions:

Callable

Describes a financial security (like a bond) that can be redeemed or "called" by the issuer before its maturity date, usually at a predefined price.

Convertible

Refers to a security (like bonds or preferred shares) that can be converted into a different form, commonly shares of the company's common stock.

Secured

Refers to loans or debt that are backed by collateral, reducing the risk for lenders.

Unsecured

Refers to loans or debts that are issued and supported only by the borrower's creditworthiness, rather than by any type of collateral.