Which of the Following Ratios Is Calculated by Dividing Current

question 146

Multiple Choice

Which of the following ratios is calculated by dividing current assets by current liabilities?

• A)Quick ratio
• B)Solvency ratio
• C)Debt ratio
• D)Current ratio

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Definitions:

Perfectly Competitive

A market structure characterized by a large number of small firms, homogenous products, and free entry and exit, leading to the optimal distribution of resources.

Constant Returns

A condition in production where increasing the amount of inputs results in a proportional increase in outputs.

U-shaped

A graphical representation describing a situation or relationship that initially decreases, reaches a minimum point, and then increases.

Long-run Average Cost

The cost per unit of output when all factors of production, including capital, are variable and optimized for scale.