The Type of Ratio That Indicates the Firm's Ability to Provide

question 102

Multiple Choice

The type of ratio that indicates the firm's ability to provide adequate returns in the form of dividends and share price appreciation is:

• A)Profitability ratios
• B)Asset management ratios
• C)Liquidity ratios
• D)Financial leverage management ratios

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Definitions:

Barrier to Entry

Obstacles that make it difficult for new competitors to enter a market, such as capital requirements, technology challenges, and government policies; essentially a rephrasing of "Entry Barriers".

Hairdressers

Professionals trained in cutting, styling, and treating hair.

Natural Monopoly

A market condition where a single company can provide goods or services at a lower cost than any potential competitor, leading to a monopoly due to natural market forces.

Positive Externality

A benefit that affects a party who did not choose to incur that benefit, often associated with public goods and services.