Ratios That Test Liquidity Include All of the Following EXCEPT

question 85

Multiple Choice

Ratios that test liquidity include all of the following EXCEPT:

• A)acid-test ratio.
• B)current ratio.
• C)return on assets.
• D)inventory turnover.

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Definitions:

Opportunity Costs

A rephrased definition: The potential gains or benefits that are lost when choosing one alternative over another in decision-making.

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.

Income Statement

A financial statement that shows a company’s revenues, expenses, and profits or losses over a specific period.

Committed Fixed Cost

Expenses a company has committed to, unrelated to its level of production or business activity.