Which of the Following Ratios Is a Measure of the Company's

question 37

Multiple Choice

Which of the following ratios is a measure of the company's ability to pay its current liabilities once inventory is subtracted from current assets?

• A) the acid-test ratio
• B) the net margin ratio
• C) the profitability ratio
• D) the inventory ratio

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Definitions:

Deprivation

The lack or denial of something considered to be a necessity, such as food, shelter, or emotional comfort.

Physical Needs

Basic requirements necessary for physiological well-being, such as food, water, shelter, and sleep.

Tension

A mental or emotional strain caused by challenging or demanding circumstances.

Homeostasis

The process by which living organisms maintain a stable internal environment despite changes in the external environment.