The ________, a More Stringent Measure Than the Current Ratio

question 39

Multiple Choice

The ________, a more stringent measure than the current ratio, measures a company's ability to pay its current liabilities.

• A)debt ratio
• B)equity ratio
• C)acid-test ratio
• D)days' sales in receivables

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Definitions:

Marginal Revenue

The additional income from selling one more unit of a good; it is the change in total revenue that comes from selling an additional unit.

Long-run Supply Curve

A graphical representation that shows the relationship between the price of a good and the quantity supplied by producers over a longer period, when all inputs can be fully adjusted.

Break-even Point

The financial state at which total costs and total revenues are equal, indicating that a business or project is neither at a loss nor making a profit.

Shutdown Point

The price and output level at which a firm's revenue just covers its variable costs, below which it is better for the firm to temporarily cease operations.