Important Issues Concerning How and When Payments Are Made or Product

question 89

Multiple Choice

Important issues concerning how and when payments are made or product quality and safety specifications are governed by the contracts a company signs with its:

• A) customers.
• B) managers.
• C) employees.
• D) suppliers and distributors.
• E) stockholders.

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Definitions:

Earnings Per Share

A measure of a company's profitability that divides its net earnings available to common shareholders by the outstanding shares.

Quick Ratio

A measure of a company's ability to meet its short-term obligations using its most liquid assets, calculated as (cash + marketable securities + accounts receivable) / current liabilities.

Current Ratio

This ratio assesses a firm's capacity to cover its obligations due in the next year by comparing its current assets to its current liabilities.

Interval Measure

A financial metric used to determine how long a company can operate with its available amount of current assets, calculated usually in months.