Which of the Following Statements About Financial Statements Is Not

question 83

Multiple Choice

Which of the following statements about financial statements is not true?

• A)The net margin ratio is a profitability ratio.
• B)The current ratio is a liquidity ratio.
• C)The debt-to-assets ratio is a liquidity ratio.
• D)The dividend yield is a stock market ratio.

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Definitions:

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.

Fair Value Enterprise Method

An accounting approach for valuing a subsidiary company at its current market value rather than its book value or cost in the financial statements of a parent company.

Identifiable Net Assets

Assets that can be separately identified and measured apart from the business entity, often relevant in the valuation of companies for acquisition or reporting purposes.

Non-Controlling Interest

The portion of equity in a subsidiary not owned directly or indirectly by the parent company.