Which of the Following Ratios Is not a Measurement of the Firm's

question 2

Multiple Choice

Which of the following ratios is not a measurement of the firm's liquidity?

• A) Current ratio
• B) Cash ratio
• C) Receivables turnover
• D) Inventory turnover
• E) Total asset turnover

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Definitions:

Efficiency

The extent to which time, effort, or cost is well used for the intended task or purpose.

Equity

Fairness or justice in the way people are treated, or in financial terms, the value of an ownership interest in property, including shareholders' equity in a business.

Efficiency

The optimal allocation of resources to maximize the production of goods and services.

Total Surplus

The total net gain to society from creating and using goods and services, shown by adding together consumer and producer surplus.