Financial Ratios Are Used for All of the Following Purposes

question 47

Multiple Choice

Financial ratios are used for all of the following purposes except:

• A) by taxation authorities to determine the amount of tax payable.
• B) by shareholders to assess profitability.
• C) by creditors to monitor liquidity.
• D) by management for planning and control.

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Definitions:

Donee Beneficiary

A third party who benefits from a contract in which a promisee promises to perform certain actions that benefit this third party.

Acquired Rights

are rights that employees gain as a result of working for their employer over a period, often concerning job security and benefits.

Intended Third-party Beneficiary

A person or entity not party to a contract but whom parties to the contract intend to benefit directly through the contract’s performance.

Proving

The process of establishing the truth or validity of something through evidence or argument.