If Current Assets Are $60,000 and Current Liabilities Are $50,000,the

question 75

Multiple Choice

If current assets are $60,000 and current liabilities are $50,000,the current ratio is:

• A)0.8:1.
• B)8.3:1.
• C)2.1:1.
• D)1.2:1

---

Definitions:

Fixed Costs

Expenses that do not change with the level of goods or services produced over a short period.

Operating Cash Flow

A measure of the amount of cash generated by a company's normal business operations, indicating whether a company can generate sufficient positive cash flow to maintain and grow its operations.

DOL

Degree of Operating Leverage, which measures a company's sensitivity of operational income to its sales levels, indicating the proportion of fixed versus variable costs.

Accounting Break-Even

The point at which total revenues equal total expenses, resulting in neither profit nor loss.