Which of the Following Is not a Use of Financial

question 87

Multiple Choice

Which of the following is not a use of financial ratios?

• A) Stock valuation
• B) Assigning credit quality ratings on bonds
• C) Predicting insolvency
• D) Identification of internal corporate variables that affect a stock's systematic risk
• E) None of the above (that is, all are uses of financial ratios)

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Definitions:

Accounts Receivable

Outstanding payments from clients to a business for goods delivered or services rendered, awaiting settlement.

Accounts Payable

Money owed by a company to its creditors for goods and services that have been delivered or used but not yet paid for.

Accounts Payable

Money owed by a business to its suppliers shown as a liability on the company’s balance sheet.

Net Income

The total earnings or profit of a company after subtracting all expenses, including taxes, interest, and operating expenses, from total revenue.