Which Ratio Measures the Ability of a Company to Sell

question 4

Multiple Choice

Which ratio measures the ability of a company to sell inventory?

• A)Inventory turnover ratio
• B)Acid-test ratio
• C)Current ratio
• D)Day's sales in receivables

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Definitions:

Profits

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Interest Rate Volatility

The degree of variation of interest rates over time, impacting the valuation of financial instruments and the ability to forecast future rates.

Balance Sheets

Financial statements that summarize a company's financial position, including assets, liabilities, and shareholders' equity at a specific point in time.

Swaps

Financial agreements to exchange or "swap" cash flows or other financial instruments between two parties, typically involving interest rates, currencies, or commodities.