The Ability of a Company to Pay Its Debts Can

question 159

Multiple Choice

The ability of a company to pay its debts can be evaluated by using the ________.

• A) earnings per share
• B) return on assets ratio
• C) debt ratio
• D) fully diluted earnings per share

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Definitions:

Machinery

Equipment, especially those powered by fuel or electricity, used in the industrial production or manufacturing process.

Accumulated Depreciation

The overall depreciation cost that has been allocated to a fixed asset over the span of its useful life.

Patent Rights

Legal protections granted to inventors, giving them exclusive rights to produce, use, and sell their inventions for a limited period.

Amortization

The process of spreading out a loan or an intangible asset's cost over its useful life.