Assets Valued at $400 000 with Liabilities of $300 000

question 52

True/False

Assets valued at $400 000 with liabilities of $300 000 means a liquidity ratio of 3 to 1.

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Definitions:

Statement of Financial Position

Another term for the balance sheet, detailing a company's financial status including assets, liabilities, and equity at a specific point in time.

ROA

Return on Assets; a profitability ratio that measures how efficiently a company can manage its assets to produce profits during a period.

Total Equity

The residual interest in the assets of an entity after deducting liabilities; essentially, it represents the ownership value in the firm.