Which of the Following Ratios Is Used to Measure a Firm's

question 65

Multiple Choice

Which of the following ratios is used to measure a firm's short-term liquidity?

• A) accounts receivable turnover ratio
• B) inventory turnover ratio
• C) quick ratio
• D) debt-to-equity ratio
• E) equity-to-debt ratio

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Definitions:

Excess Capacity

A situation where a firm is producing at a lower scale of output than it has been designed for.

Monopolistic Competitor

A firm operating in a market structure where many companies sell products that are similar but not identical, leading to competition based on product differentiation.

ATC Curve

Represents the average total cost of production at different levels of output, showing how cost per unit changes with scale.

Excess Capacity

The ability of a company to produce more goods or services than currently needed, exceeding the current demand.