The Ratios Used in Evaluating a Company's Liquidity and Short-Term

question 178

Short Answer

The ratios used in evaluating a company's liquidity and short-term debt paying ability that complement each other are the ______________ ratio and the ______________ ratio.

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Definitions:

Finished Goods Inventory

The completed products that are ready for sale but have not been sold yet.

Manufacturing Overhead

Represents all the indirect costs associated with the production process of a company, including utilities, depreciation, and salaries not directly tied to specific units of product.

Direct Labor

The cost of wages and benefits for employees directly involved in the production of goods or services.

Raw Materials

The initial inputs in production, including basic substances used to manufacture goods.