Which of the Following Statistics Is of More Significance to a Long-Term

question 92

Multiple Choice

Which of the following statistics is of more significance to a long-term creditor than to a short-term creditor?

• A)Interest coverage ratio
• B)Receivables turnover rate
• C)Working capital
• D)Quick ratio

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Definitions:

Inflation

The velocity at which the overall cost of products and services climbs, reducing purchasing capability.

Full Disclosure

Full disclosure is a policy requiring companies to provide all relevant, material information about their operations, financial condition, and management to investors and stakeholders.

SEC

The United States Securities and Exchange Commission is a federal body tasked with overseeing the securities market and safeguarding investors.

Fair Price

The equilibrium price for a good or service in the market where the quantity supplied equals the quantity demanded.