Which of the Following Cannot Be Used to Assess Solvency

question 14

Multiple Choice

Which of the following cannot be used to assess solvency of a company?

• A) Liabilities to stockholders' equity
• B) Current position analysis
• C) Ratio of net sales to assets
• D) Inventory analysis

---

Definitions:

Operating Section

Part of an income statement that discloses revenues and expenses related directly to the core business operations.

Direct Method

A cash flow statement approach that lists major payments and receipts within operating activities directly.

Noncash Accounts

Accounts that represent transactions not involving physical cash, such as depreciation, amortization, or accruals.

Direct Method

A cash flow statement preparation approach that lists major operating cash receipts and payments, providing a clearer view of cash flow sources and uses.