Which of the Following Ratios and Rates That Measure Debt-Paying

question 110

Multiple Choice

Which of the following ratios and rates that measure debt-paying ability focuses on the long-term position of a company?

• A)Quick ratio
• B)Inventory turnover
• C)Current ratio
• D)Debt ratio

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Definitions:

Assigned Value

A valuation determined for an asset or liability, often used in accounting to assign costs or values.

Risk Adjusted NPV

Net Present Value method adjusted for the risk associated with the uncertain cash flows, taking into account the variability of returns and the cost of capital.

Initial Cost

The initial expenditure required to acquire an asset, including the purchase price and any additional costs necessary to get the asset ready for its intended use.

Cash Inflows

Funds that are received, whether from business operations, investment returns, or financing activities.