The Ratios That Assess the Ease with Which the Assets

question 82

Multiple Choice

The ratios that assess the ease with which the assets of the organization can be converted into cash are

• A)liquidity ratios.
• B)profitability ratios.
• C)debt ratios.
• D)operating ratios.
• E)None of these.

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Definitions:

Corporations

Are legal entities that are separate and distinct from their owners. They have the ability to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes.

Vertical Analysis

A method of financial statement analysis in which each entry is listed as a percentage of another item, typically used for income statements where entries are compared to total sales.

Total Assets

The sum of all resources owned by a company, valued according to accounting principles, including both current and non-current assets.

Current Position Analysis

A financial evaluation that assesses a company's current financial health, focusing on its ability to meet short-term obligations with its current assets.