The Ratios That Are of Special Interest to the Firm's

question 37

Multiple Choice

The ratios that are of special interest to the firm's creditors and measure the firm's ability to pay short-term debts as they come due are called _____ ratios.

• A)profitability
• B)earnings
• C)liquidity
• D)current
• E)activity

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Definitions:

Management Flexibility

The ability of a business's management team to adapt to changes or challenges in the operating environment, including strategic decision-making.

Personal Liability

The legal responsibility of an individual to compensate for harm or damages their actions have caused, potentially affecting their personal assets.

LLP

Limited Liability Partnership, a legal entity where some or all partners have limited liabilities, protecting personal assets from business debts and liabilities.

State Statute

A written law enacted by a state legislature or other governing authority.