Which of the Ratios Listed Helps to Indicate Whether Current

question 8

Multiple Choice

Which of the ratios listed helps to indicate whether current liabilities could be paid without having to sell the inventory?

• A) Current ratio
• B) Profit margin
• C) Quick ratio
• D) Debt to equity

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Definitions:

Analyzing

The process of examining financial data to understand the state of a business, spot trends, or make decisions.

Sole Proprietorship

A business owned and operated by a single individual, where there is no legal distinction between the owner and the business entity.

Stockholder

An individual or entity that owns shares in a corporation, thereby having a claim on part of its assets and earnings.

Indefinitely

For an unlimited or unspecified period of time, without a predetermined end point.