Liquidity Ratios Use Information About Current Assets and Current Liabilities

question 182

True/False

Liquidity ratios use information about current assets and current liabilities.

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Definitions:

Finished Goods Inventory

The inventory of products that have been manufactured and are ready to be sold to customers.

Production Needs

The specific requirements and quantities of materials, labor, and capacity required to manufacture products.

Sales

The total amount of a company's revenue generated from goods or services sold over a designated period.

Cash Collections

The activity of gathering and receiving cash payments from customers or clients, often related to sales or services provided.