"Days of Inventory" Is an Example of A(n)

question 19

Multiple Choice

"Days of inventory" is an example of a(n)

• A) leverage ratio.
• B) liquidity ratio
• C) activity ratio.
• D) asset management ratio.
• E) profitability ratio.

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Definitions:

Fair Value

The value obtained for offloading an asset or incurred in passing on a liability in a smooth transaction among those active in the market on the evaluation date.

Bonds Payable

Long-term debt securities issued by a company, promising to pay a specified sum of money at a future date.

Straight Line Amortization

A method of gradually reducing the book value of an intangible asset over its useful life in equal installments.

Goodwill Impairment

The process of reducing the book value of goodwill on the balance sheet if the fair value of the entity is less than its carrying amount.