Which of the Following Ratios Is Not a Measure of Long-Term

question 44

Multiple Choice

Which of the following ratios is not a measure of long-term solvency risk?

• A) Debt /Equity Ratio
• B) Interest Coverage Ratio
• C) Operating Cash Flows to Current Liabilities Ratio
• D) Liabilities to Assets Ratio

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Definitions:

Goods Returned

Products sent back to the seller by the buyer, usually due to defects, inaccuracies, or dissatisfaction.

Inventory

The raw materials, work-in-process products, and finished goods considered to be the portion of a business's assets that are ready or will be ready for sale.

Current Asset

Assets expected to be converted into cash, sold, or consumed within one year or the normal operating cycle, whichever is longer.