Which of the Following Would Generally Indicate an Improvement in a Company's

question 76

Multiple Choice

Which of the following would generally indicate an improvement in a company's financial position,holding other things constant?

• A) The TIE declines.
• B) The DSO increases.
• C) The quick ratio increases.
• D) The current ratio declines.
• E) The total assets turnover decreases.

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Definitions:

Investment Turnover

A measure of a company's efficiency in using its investments to generate sales, calculated as sales divided by the average value of investments.

Profit Margin

The percentage of revenue that remains as profit after all expenses have been subtracted from sales.

Investment Turnover

Investment turnover measures the rate at which a company or fund buys and sells its portfolio of investments, helping to understand its trading activity level and potential profitability.

Investment Center Performance

A measure of the efficiency and profitability of an investment center, which is a business unit responsible for its own revenues, expenses, and assets.