The Power to Participate in the Financial and Operating Policy

question 49

Multiple Choice

The power to participate in the financial and operating policy decisions of an entity is known as:

• A) control;
• B) significant influence;
• C) share ownership;
• D) joint control.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health.

Acid-test Ratio

A financial metric that measures a company's ability to cover its short-term liabilities with its most liquid assets.

Debt-to-equity Ratio

This proportion demonstrates the relative use of debt and shareholders' equity in the capital funding of a company's assets.

Receivable Turnover

A financial metric indicating how efficiently a company collects cash from credit sales by measuring the number of times average accounts receivable are collected over a period.