As a General Rule,financial Analysts Suggest That a Small Business

question 71

Multiple Choice

As a general rule,financial analysts suggest that a small business maintain a(n) ________ ratio of at least 2:1.

• A)debt-to-net worth
• B)current
• C)inventory turnover
• D)quick

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Definitions:

Liability

An obligation or debt owed to another party, which can be a factor in personal and business finances.

Gain or Loss

The financial result from selling an asset for more (gain) or less (loss) than its purchase price, important for tax calculations related to capital gains and losses.

Section 1231 Property

Property related to the business or trade, the sale of which may result in ordinary income or capital gains treatment depending on the specifics of the transaction.

Trade or Business

Activities conducted for the purpose of income or profit, engaged in consistently and regularly to qualify as deductible business expenses.