The Ratios That Are Used to Determine a Company's Short-Term

question 10

Multiple Choice

The ratios that are used to determine a company's short-term debt-paying ability are

• A)asset turnover times interest earned current ratio and accounts receivables turnover.
• B)times interest earned inventory turnover and accounts receivables turnover.
• C)times interest earned accounts receivable ratio current ratio and inventory turnover.
• D)current ratio account receivable turnover and inventory turnover.

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Definitions:

Decrease in Supply

A situation where the quantity of a good or service that producers are willing to offer for sale at a given price level decreases.

Decrease in Demand

A reduction in the quantity of a good or service that consumers are willing and able to purchase at a given price range.

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing to buy.