The Ratio That Averages About 2

question 158

Multiple Choice

The ratio that averages about 2.0 for all industries is the

• A) inventory turnover.
• B) acid-test ratio.
• C) current ratio.
• D) debt-to-assets ratio.
• E) debt-to-equity ratio.

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Definitions:

Standard Oil

An American oil producing, transporting, refining, and marketing company. Established in 1870 by John D. Rockefeller and associates, controlling much of the oil industry in the U.S. until it was broken up in 1911.

Trust

A legal arrangement where one party, the trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary.

Mergers

The combination of two or more companies into a single entity, often to achieve greater efficiency or market share.

Economists

Professionals who study the distribution, production, and consumption of goods and services.