Which of the Following Ratios Would Be the Most Useful

question 97

Multiple Choice

Which of the following ratios would be the most useful in evaluating the ability of a firm to meet its short-term obligations?

• A) The quick ratio (acid test)
• B) Return on equity
• C) Total asset turnover
• D) Operating profit margin

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Definitions:

Compromise

Compromise involves finding a middle ground or mutual agreement between parties with conflicting interests or opinions, often by making concessions.

Collaboration

The process of two or more people or organizations working together to complete a task or achieve a goal.

Avoidance

A psychological defense mechanism where individuals sidestep potentially harmful or uncomfortable situations.

Competition

The rivalry among businesses or individuals for resources, recognition, or winning, often drives innovation and improvement.