Match Each Ratio That Follows to Its Use (Items A-H)

question 22

Multiple Choice

Match each ratio that follows to its use (items a-h) . Items may be used more than once.
-Current ratio

• A)Assess the profitability of the assets
• B)Assess how effectively assets are used
• C)Indicate the ability to pay current liabilities
• D)Indicate how much of the company is financed by debt and equity
• E)Indicate instant debt-paying ability
• F)Assess the profitability of the investment by common stockholders
• G)Indicate future earnings prospects
• H)Indicate the extent to which earnings are being distributed to common stockholders

Grasp the concept of budgeted materials needed based on production and inventory requirements.

Understand how budgeted purchases are determined based on sales, inventory goals, and production needs.

Identify the key aspects of budget preparation, starting from sales forecasting to ending with cash and financial statement budgeting.

Recognize the importance of safety stock and its role in fulfilling customer demand.

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