Match the Following Types of Ratios with Their Definitions

question 3

Multiple Choice

Match the following types of ratios with their definitions.
-__ Efficiency

• A) assess whether an organization is maintaining an adequate level of cash or near-cash assets.
• B) assess how well an organization did financially.
• C) compares numbers on the balance sheet to total assets and numbers on operating statement to revenues.
• D) assess the organization's ability to meet its financial debt obligations (principal and interest).
• E) assess how well an organization manages its activities.

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Definitions:

Service Business

is a type of business that provides intangible products or services to consumers instead of physical goods.

Financial Statement

A comprehensive report detailing a company's financial performance, position, and cash flows over a specific period.

Credit Terms

Conditions under which credit is extended by a lender to a borrower, detailing the repayment time frame, interest rate, and other conditions of the credit agreement.

Merchandise

Goods bought for resale in the course of business, typically in a retail or wholesale establishment.