All of the Following Ratios Are Used to Evaluate Short-Term

question 39

Multiple Choice

All of the following ratios are used to evaluate short-term liquidity except:

• A)the receivable turnover ratio.
• B)the current ratio.
• C)the inventory turnover ratio.
• D)the gross margin ratio.
• E)None of the answer choices is correct.

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Definitions:

Carrying Value

The book value of assets and liabilities on the balance sheet, calculated as the original cost minus any depreciation, amortization, or impairment costs.

Retired

Often refers to the status of an asset that has been taken out of use and is no longer productive.

Interest Rate

The percentage of a loan that a borrower must pay as interest, usually shown as an annual rate based on the outstanding loan amount.

Mortgage

A legal agreement whereby a lender lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt.