For Which of the Following Is the Working Capital and Current

question 16

Multiple Choice

For which of the following is the working capital and current ratio is most useful?

• A)In evaluating a company's liquidity.
• B)In evaluating a company's solvency.
• C)In evaluating a company's profitability.
• D)In evaluating a company's revenues.

---

Definitions:

Supply and Demand

Supply and demand is a fundamental economic model that explains the interaction between the sellers of a resource and the buyers for that resource, determining its price and quantity in a market.

Allocation of Resources

The process of assigning available resources, or factors of production, to specific uses chosen among many possible and competing alternatives.

Productivity

The assessment of how effectively a person, machine, factory, or system can transform inputs into valuable outputs.

Labor Input

Refers to the total hours worked or the number of employees engaged in production in the economy.