Which of These Categories of Financial Ratios Is Used to Measure

question 65

Multiple Choice

Which of these categories of financial ratios is used to measure the ability of a firm to meet its short-term financial obligations?

• A) liquidity ratios
• B) profitability ratios
• C) activity ratios
• D) leverage ratios

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Definitions:

Basic Format

Basic Format in the context of accounting and finance often refers to a standard or simplified way of presenting financial statements or data.

Journal Entries

The recordings of transactions in the accounting journals, which form the basis for all financial reporting and analysis.

Deferred Revenues

Deferred revenues represent income received by a company for goods or services yet to be delivered or performed, also known as unearned revenue.

Financial Position

This term describes the status of a person's or entity's financial health, determined by their assets, liabilities, and equity.