All of the Following Measure Liquidity EXCEPT

question 60

Multiple Choice

All of the following measure liquidity EXCEPT

• A) current ratio.
• B) inventory turnover.
• C) acid-test ratio.
• D) operating return on assets.

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Definitions:

Additional Funds Needed

Estimated funds required beyond what is currently available to the business to finance projected growth.

Payout Ratio

A financial metric used to measure the percentage of earnings paid to shareholders in dividends, indicating how much money a company is returning to shareholders versus reinvesting.

AFN Equation

Additional Funds Needed equation, a financial formula used to estimate the additional amount of funding a firm would require to support its increased level of sales.

Sales Forecasts

The process of estimating future sales. It helps businesses make informed decisions regarding inventory management, workforce needs, and financial planning.