Which of the Following Focuses on the Ability of a Company

question 28

Multiple Choice

Which of the following focuses on the ability of a company to earn profits?

• A) The return on total assets
• B) The inventory turnover
• C) The quick ratio
• D) The fixed charge coverage ratio

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Definitions:

Defective

Lacking in some necessary quality, faulty, or having defects, making it unfit for its intended use.

Primarily Liable

Being directly responsible for a debt or obligation, without secondary parties to share the liability.

Secondarily Liable

Someone who is secondarily liable holds responsibility to fulfill an obligation if the primary party fails to do so, commonly seen in guarantor or co-signer financial arrangements.

Payable

Refers to money that is owed by a person or company and must be paid to another party.