Which One of the Following Would NOT Contribute to the Positive

question 15

Multiple Choice

Which one of the following would NOT contribute to the positive creditworthiness of the firm?

• A) the firm's financial structure
• B) its profitability
• C) the number of bank accounts it holds
• D) the stability of its cash flows

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Definitions:

Acid-Test Ratio

The acid-test ratio, also known as the quick ratio, measures a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.

Marketable Securities

Financial instruments that can be easily converted into cash. They include stocks, bonds, and Treasury bills among others.

Current Liabilities

Financial responsibilities that must be settled within a period of one year.

Noncurrent Assets

Long-term assets that are not expected to be converted into cash within a year, such as property, plant, and equipment.