Use the Information for the Question(s)below

question 35

Multiple Choice

Use the information for the question(s) below.
-The above graph shows the levels of fixed assets,permanent working capital and temporary working capital for a certain company.If the graphs below show the excess cash reserves on hand each quarter,which best illustrates a conservative financing policy?

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Definitions:

Gross Margin Ratio

A financial ratio that measures a company's financial health, calculated by subtracting the cost of goods sold from net sales and dividing by net sales.

Sales Revenue

The total amount of money received by a company from sales of goods or services before any expenses are subtracted.

Cost of Goods Sold

Expenses specifically related to producing the merchandise a company markets.

Acid-test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its quick or liquid assets.