Which of the Following Ratios Would Generally Be Used to Evaluate

question 59

Multiple Choice

Which of the following ratios would generally be used to evaluate a firm's overall liquidity position?

• A)Working capital
• B)Current ratio
• C)Acid-test ratio
• D)Cash ratio
• E)Inventory turnover in days

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Definitions:

Equal Payments

Payments that are the same in amount, typically referring to the consistent and periodic payments made over the life of a loan or for a subscription service.

Rate of Interest

The percentage at which interest is paid by a borrower for the use of money they borrow from a lender.

Final Payment

The last payment made to settle a financial obligation, completing the payment schedule.

Interest Annually

The payment received or owed for the use of money calculated over a one-year period.