What Ratio Will Definitely Increase When a Firm Increases Its

question 58

Multiple Choice

What ratio will definitely increase when a firm increases its annual sales with no corresponding increase in assets?

• A) Asset turnover
• B) Current ratio
• C) Liquidity ratio
• D) Quick ratio

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Definitions:

Authorized Expenditures

Expenses that have been approved for payment under the terms of a contractual agreement or budgetary consideration.

Spending Legislation

Legislation that dictates how government funds are to be spent, often detailing specific allocations for public sector initiatives and programs.

Negative Externalities

Economic activities that impose a negative effect on an unrelated third party, such as pollution from a factory affecting nearby residents.

Public Choice Economist

An economist who applies economic theories and methodologies to analyze and understand political behavior and decisions, particularly in the context of public policy and government actions.