Cash, Short-Term Investments and Net Current Receivables Are All Components

question 63

True/False

Cash, short-term investments and net current receivables are all components of the acid-test ratio.

---

Definitions:

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically used for the financing of payroll, accounts payable, and inventories.

Firm's Securities

Financial instruments issued by a company, such as stocks or bonds, representing ownership or creditorship in the firm.

Preferred Dividends

Dividends that are allocated and paid to preferred shareholders before any dividends can be issued to common shareholders.

Voting Rights

The rights of shareholders to vote on company matters, typically exercised at annual meetings.