Which of the Following Ratios Indicates How Rapidly the Firm's

question 57

Multiple Choice

Which of the following ratios indicates how rapidly the firm's credit accounts are being collected?

• A) Debt ratio
• B) Gross profit margin
• C) Accounts receivable turnover ratio
• D) Fixed asset turnover

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Definitions:

Significant Liability(ies)

Refers to considerable financial obligations or debts that a company or individual has, which may impact their financial stability or creditworthiness.

Loans And Leases

Financial arrangements where loans involve borrowing money that must be repaid with interest, while leases involve paying for the use of an asset for a specified period.

Deposits

Funds placed into an account at a financial institution for safekeeping and potential interest earnings.

Investment Securities

Financial instruments purchased with the aim of generating income or appreciating in value, such as stocks, bonds, and mutual funds.