The Current Ratio

question 63

Multiple Choice

The current ratio

• A)Measures the effect of operating income on profit.
• B)Is used to measure a company's profitability.
• C)Is used to measure the relationship between assets and long-term debt.
• D)Only relates to noncurrent liabilities.
• E)Is used to evaluate a company's ability to pay its short-term obligations.

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Definitions:

Decentralization

The distribution of decision-making power away from a central authority, allowing for more localized or divisional decision control.

Organization Structure

The arrangement of roles, responsibilities, and relationships within an organization, determining how information flows and decisions are made.

Chief Purchasing Officer (CPO)

A high-ranking executive responsible for managing an organization's procurement processes and policies.

Total Cost of Ownership

The comprehensive assessment of the direct and indirect costs and benefits related to the purchase of any capital investment, such as computer equipment, software, or systems.