The Ratio of the Sum of Cash, Receivables, and Marketable

question 119

True/False

The ratio of the sum of cash, receivables, and marketable securities to current liabilities is referred to as the current ratio.

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business.

Short Run

A time period in economics during which at least one input, such as plant size, is fixed and cannot be altered.

Profit Maximization

The procedure through which a business identifies the pricing and production volume that yields the highest earnings.

Market Price

The price at which a good or service is offered in the marketplace.