Turnover Ratios Differ from the Current and Quick Ratios in That

question 187

Multiple Choice

Turnover ratios differ from the current and quick ratios in that they

• A)are based on working capital instead of cash.
• B)are based on a point of time instead of a period of time.
• C)are activity ratios.
• D)measure the profitability of a company instead of its liquidity.

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Definitions:

Revenues

Income generated from normal business operations and includes discounts and deductions for returned merchandise.

Costs

The amount of money or resources expended in order to obtain something or achieve a goal.

Indirect Expenses

Costs that are not directly linked to the production of goods or services, such as administrative and marketing expenses.

Joint Benefit

Benefits or outcomes that are shared or enjoyed by more than one party, often seen in partnerships or collaborative projects.