A Bank That Wants to Examine the Operating Efficiency of a Borrower

question 146

Multiple Choice

A bank that wants to examine the operating efficiency of a borrower would most likely examine which of the following ratios?

• A)Cost of goods sold ÷ Average inventory
• B)Income before interest and taxes ÷ Interest payments
• C)Cost of goods sold ÷ Net sales
• D)Current assets ÷ Current liabilities
• E)All of the options are correct.

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Definitions:

Earth Day

An annual event aimed at promoting environmental awareness and conservation practices, celebrated on April 22.

Proved Reserves

Specific mineral deposits that have been shown by scientific examination and cost calculation to be extractable and deliverable to the market for use, with current technology and expected market conditions.

Mineral

A naturally occurring, inorganic solid with a definite chemical composition and crystalline structure, used in various industries.

Conservation

The sustainable management and use of natural resources to prevent depletion or degradation, safeguarding biodiversity and ecosystems.