If Mary Wants to Compare What Her Small Business Owes

question 17

Multiple Choice

If Mary wants to compare what her small business owes to what it owns in order to assess her ability to meet obligations in case of liquidation,she needs to look at the ________ ratio.

• A)quick
• B)total debt turnover
• C)asset turnover
• D)debt-to-net worth

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Definitions:

Unproductive

Refers to resources or activities that do not contribute to the output or efficiency of a process or operation.

Fixed Costs

Costs that do not change in total with changes in the volume of production or sales, such as rent, salaries, and insurance.

Relevant

Pertaining to something that is closely connected or appropriate to the matter at hand, especially in decision making or problem-solving.

Decision

The act of making a choice among various alternatives.