The Current Ratio

question 83

Multiple Choice

The current ratio

• A) is a measure of efficiency.
• B) is a measure of leverage.
• C) is a measure of profitability.
• D) is a measure of a company's liquidity.

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Definitions:

Fixed Manufacturing Overhead

The portion of manufacturing overhead costs that do not change with the level of production, such as salaries of supervisory staff and depreciation of factory equipment.

Disk Drives

Disk drives are data storage devices used for storing and retrieving digital information using one or more rigid rapidly rotating disks (platters) coated with magnetic material.

Financial Advantage

The benefit gained by making a decision or taking an action which results in a better financial position.

Traceable Fixed Costs

Costs directly associated with a specific business segment or product, which would disappear if the segment or product were discontinued.