Which of the Following Statements Provides an Accurate Description of Financial

question 210

Multiple Choice

Which of the following statements provides an accurate description of financial ratios?

• A) Liquidity ratios use information about current assets and current liabilities.
• B) Asset management ratios focus on the relationship between profits and either average inventory or total assets.
• C) Net margin and return on investment are useful leverage ratios.
• D) Inventory turnover is one method for determining the company's financial liquidity.
• E) Leverage ratios are helpful in assessing how well assets are employed in generating sales.

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Definitions:

World War II

A global conflict that lasted from 1939 to 1945, involving most of the world's nations, including the great powers, eventually forming two opposing military alliances, the Allies and the Axis.

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The cultural and economic order that encourages the acquisition of goods and services in ever-increasing amounts.

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Financial instruments issued by banks allowing cardholders to borrow funds with which to pay for goods and services with the promise to repay the bank, along with agreed charges, at a later date.

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Large-scale or major corporations that hold significant influence and power in the economy and political landscape.