The Ratios That Are Used to Determine a Company's Short-Term

question 33

Multiple Choice

The ratios that are used to determine a company's short-term debt paying ability are

• A) asset turnover, times interest earned, current ratio, and account receivable turnover.
• B) times interest earned, inventory turnover, current ratio, and accounts receivable turnover.
• C) times interest earned, quick ratio, current ratio, and inventory turnover.
• D) current ratio, quick ratio, accounts receivable turnover, and inventory turnover.

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Definitions:

Covariance

A metric that quantifies the extent to which two variables change in correspondence with each other.

Correlation Coefficient

A statistical measure that indicates the extent to which two variables change together, showing how one variable's movement is related to another's.

Standard Deviation

A statistical measurement that illustrates how spread out the values of a data set are around the mean, indicating the variability or volatility.

Expected Returns

The anticipated average return of an investment over a certain period, taking into account both the probability and the impact of all possible outcomes.