Return on Investment Is an Example of A(n)________ Ratio

question 43

Multiple Choice

Return on investment is an example of a(n) ________ ratio.

• A)operations
• B)profitability
• C)liquidity
• D)leverage
• E)activity

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Definitions:

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.

Recourse

In secured lending, if the asset collateralizing a loan proves not to have the value anticipated, recourse implies the borrower is still responsible for the debt. The lender is said to have recourse to the borrower.

Seasonal Working Capital

Additional working capital needed to support fluctuations in business activity due to seasonal changes in demand.

Short-Term Loans

Loans that are scheduled to be repaid in less than a year, often used for working capital or emergency financing needs.