How Efficiently a Firm Is Using Its Assets Is Measured

question 19

Multiple Choice

How efficiently a firm is using its assets is measured by:

• A) liquidity ratios.
• B) market value ratios.
• C) profitability ratios.
• D) activity ratios.
• E) leverage ratios.

---

Definitions:

Commitment

The emotional or psychological attachment an individual feels towards a task, goal, or organization, which can influence their willingness to continue effort over time.

Optimism

A mental attitude characterized by hope and confidence in success and positive outcomes.

Escalation of Commitment

A behavioral pattern where an individual or group continues to invest in a decision despite facing negative outcomes, often due to cognitive biases or the desire to avoid loss or admit failure.

Path Dependency

The idea that decisions we face for any given circumstance are limited by the decisions we have made in the past, even though past circumstances may no longer be relevant.