Which of the Following Types of Financial Ratios Indicates How

question 49

Multiple Choice

Which of the following types of financial ratios indicates how efficiently the managers of the organization are collecting the revenue due to the organization from the sale of its products or services?

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

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Definitions:

Inventory

The items and substances that a company possesses with the ultimate aim of selling them or using them in manufacturing.

Interest Expense

Interest expense is the cost incurred by an entity for borrowed funds, which can include interest on bonds, loans, convertible debt, and lines of credit.

Operating Cash Flow

The cash generated from the normal operating activities of a business, reflecting its operational profitability.

Net Income

A company's overall earnings following the deduction of all expenses and taxes from its income.