Which Type of Financial Ratio Is Computed by Dividing the Organization's

question 73

Multiple Choice

Which type of financial ratio is computed by dividing the organization's present assets by its present liabilities?

• A) Inventory turnover ratio
• B) Days sales outstanding ratio
• C) Profit ratio
• D) Current ratio
• E) Debt-to-assets ratio

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Definitions:

Semiannually

Semiannually means occurring twice a year, typically at six-month intervals.

Discounted

A financial term referring to an instrument, transaction, or cash flow that is valued in present terms, taking into account the time value of money.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, used in the evaluation of investment opportunities.

Cash Flow Stream

A series of cash inflows and outflows over a period of time, often used in financial models to determine investment viability or project returns.