The Current Ratio and Inventory Turnover Ratios Both Help Us

question 67

True/False

The current ratio and inventory turnover ratios both help us measure the firm's liquidity.The current ratio measures the relationship of a firm's current assets to its current liabilities, while the inventory turnover ratio gives us an indication of how long it takes the firm to convert its inventory into cash.

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Definitions:

Overweight

A condition characterized by having more body weight than is considered normal or healthy for a certain height.

Obese

A medical condition characterized by excessive body fat accumulated to the extent that it may have a negative effect on health.

Diagnosed

The process of identifying a disease or condition by its signs, symptoms, and examination results.

Diabetes

A group of diseases characterized by high blood sugar levels over a prolonged period, resulting from defects in insulin production, insulin action, or both.