Current Ratio (Current Assets Divided by Current Liabilities) Is a Type

question 3

Multiple Choice

Current ratio (current assets divided by current liabilities) is a type of _____ financial measure.

• A)profit ratio
• B)operating ratio
• C)liquidity ratio
• D)leverage ratio
• E)activity ratio

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Definitions:

Inventory

A company's merchandise, raw materials, and finished and unfinished products which have not yet been sold; considered an asset on the balance sheet.

Book Value

The net asset value of a company calculated as total assets minus intangible assets and liabilities.

Net Income

The residual income a company has after expenses and taxes are deducted from its total income.

Comprehensive Income

The change in equity of a company during a period from transactions and other events, including all non-owner changes.