Which of the Following Is Not a Measure of Long-Term

question 67

Multiple Choice

Which of the following is not a measure of long-term credit risk?

• A) Quick ratio.
• B) Debt ratio.
• C) Interest coverage ratio.
• D) Trend in net cash provided by operating activities.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business.

Measure Of Liquidity

An assessment of how easily and quickly an asset can be converted into cash without significantly affecting its value.

Debt To Total Assets

A ratio that indicates the proportion of a company's assets financed through debt.

Liquidity

The measure of how easily an asset or security can be converted into ready cash without affecting its market price.