Which of the Following Ratios Is Used to Analyze a Company's

question 64

Multiple Choice

Which of the following ratios is used to analyze a company's liquidity?

• A)Return on assets ratio
• B)Inventory turnover ratio
• C)Earnings per share
• D)Asset turnover ratio

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Definitions:

Owners' Equity

The residual interest in the assets of a business after deducting liabilities, essentially the ownership interest in the business.

Store Equipment

The fixtures and tools used in a retail store to display and manage products, excluding inventory.

Owners' Claims

Owners' claims refer to the interests or rights of ownership that shareholders or proprietors have in a company, including profits and assets.

Business Assets

Resources owned by a business that have economic value and can contribute to future profits, such as equipment, inventory, and patents.