Which of the Following Is a Normative Statement

question 11

Multiple Choice

Which of the following is a normative statement?

• A) The current exchange rate is 0.7 British pounds per U.S.dollar.
• B) In January, the average temperature in Fargo, North Dakota, is 56 degrees.
• C) Winters in Arkansas are too cold.
• D) On average, people save 15% when they switch to GEICO.
• E) University of Virginia graduates earn more than Duke University graduates.

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Definitions:

Inventory Turnover

Measures how often a company sells and replaces its stock of goods within a period, reflecting inventory management efficiency.

Times Interest Earned Ratio

A financial metric assessing a company's ability to meet its debt obligations, calculated as earnings before interest and taxes divided by interest expense.

Acid-test Ratio

A liquidity ratio that measures a company’s ability to pay off its current liabilities with quick assets, excluding inventory.

Accounts Receivable Turnover

A financial ratio that measures the efficiency of a company in collecting its receivables or the credit it has extended to customers.