Which Type of Financial Ratio Measures How Well the Managers

question 64

Multiple Choice

Which type of financial ratio measures how well the managers of L&B Rentals, Inc.are converting the organization's assets into cash or sales?

• A)leverage ratios
• B)liquidity ratios
• C)profit ratios
• D)current ratios
• E)activity ratios

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Definitions:

Fixed Cost

Costs that do not vary with the level of output or activity, remaining constant regardless of production volume.

Firm

A business organization, such as a corporation or partnership, that sells goods or services in exchange for revenue.

Price Falls

A decrease in the market price of goods or services, often due to increased supply, decreased demand, or external economic factors.