The Most Common Liquidity Ratio Is Current Assets to Current

question 58

Multiple Choice

The most common liquidity ratio is current assets to current liabilities, known as the:

• A) debt-equity ratio.
• B) current ratio.
• C) profit and loss ratio.
• D) return on investment ratio.
• E) stockholders' equity ratio.

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Definitions:

Cost Reimbursable Contract

A type of contract where the buyer reimburses the seller for all legitimate costs incurred plus a fee representing profit.

Profit

The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes involved in maintaining the business.

Punch List

A document listing work that does not conform to contract specifications, needing completion or correction before project finalization.

Supplier Obligations

Legal or contractual responsibilities that a supplier must fulfill in relation to the delivery of goods or services.