Which of the Following Statements Regarding Quality of Income Ratio

question 13

Multiple Choice

Which of the following statements regarding quality of income ratio is NOT true?

• A) A quality of income ratio will increase if a company's working capital management allows current assets such as inventory to increase out of control.
• B) Variations in the ratio can be seasonal and are the result of sales fluctuations rather than reasons for alarm.
• C) The quality of income ratio measures the portion of income that was generated in cash.
• D) The quality of income ratio is useful when compared to industry competitors or to prior periods.

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Definitions:

Free Radical Bromination

A chemical reaction process whereby bromine radicals (Br.) selectively react with C-H bonds in hydrocarbons to form brominated products.

Methane

The simplest alkane, a colorless, odorless gas (CH4), that is the main component of natural gas and a potent greenhouse gas.

Transition State

A high-energy state during a chemical reaction that represents the point of highest energy through which reactants must pass before forming products.

Resonance Stabilized Radical

A radical species whose stability is enhanced by the distribution of its unpaired electron over multiple atoms via resonance.