A fiNancial Manager Who Needs to fiNd Out How Long

question 27

Multiple Choice

A financial manager who needs to find out how long it will take before their firm runs out of cash if no further cash comes in should consider the ________________.

• A) Current ratio.
• B) Quick ratio.
• C) Cash ratio.
• D) Net working capital to total assets ratio.
• E) Interval measure.

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Definitions:

Journal Entry

A record of a business transaction in an accounting ledger that includes the accounts and amounts to be debited and credited.

Account Number

A unique identifier assigned to an account that enables transactions and tracking.

Debit

A transaction recorded in accounting that leads to a rise in a company's assets or a reduction in its liabilities on the balance sheet.

Credit

An accounting entry that increases liabilities or equity, or decreases an asset or expense account, on a company's balance sheet.