Use the Following Selected Financial Information to Compare These Three

question 24

Essay

Use the following selected financial information to compare these three companies and answer the questions that follow.
$\begin{array}{lllcc}&\begin{array}{l}\text { Ratio } \\\text { Results at } \\\underline{\text { December 31: }}\end{array} & \underline{\text { RBC Co. }} & \underline{\text { Rama Co. }} &\underline{\text { Rock Co. }} \\ \text { Current Ratio } & 2015 & 3.3 & 2.8 & {1.8} \\&2014 & 2.5 & 2.8 & 3.2 \\ \text { Quick Ratio } &2015 & 2.1 & 1.5 & 0.5 \\&2014 & 2.0 & 1.3 & 1.2 \\ \text { Inventory Tunover Ratio } &2015 & 5.4 & 6.8 & 6.0 \\&2014 & 5.5 & 7.6 & 12.6\end{array}$ A) Which company appears to be in the best position regarcing asset efficiency based solely on the invent ory turnover ratio?
B) Wrich company has the best short-term liquidity?
C) Which company appears to be heading in the wrong direction in terms of its ability to pay current obligations as they come chue?

---

Definitions:

Criterion-related Validity

The extent to which a measure is associated with an external criterion or outcome, assessing the test's predictive or concurrent accuracy.

Content Validity

The extent to which a test measures all aspects of the concept it intends to measure.

Criterion-related Reliability

A measure of how well a test predicts or correlates with a specific outcome or behavior, used to assess the validity of the test for specific purposes.

Construct Validity

The extent to which a test or instrument measures the theoretical concept or construct that it is intended to measure.