The Receivable Turnover and Inventory Turnover Ratios Are Used to Analyze

question 67

Multiple Choice

The receivable turnover and inventory turnover ratios are used to analyze

• A) leverage.
• B) long-term solvency.
• C) profitability.
• D) liquidity.

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Definitions:

Future Cash Inflows

The projection of money expected to be received by a business or investment in the future.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.

Net Present Value

A calculation that compares the present value of a project’s cash inflows with the present value of its cash outflows, used in capital budgeting to assess profitability.

Payback Period

The length of time required to recoup the initial investment in a project, ignoring the time value of money.