Which of the Following Ratios Is Most Useful in Evaluating

question 29

Multiple Choice

Which of the following ratios is most useful in evaluating liquidity?

• A)Return on assets.
• B)Return on equity.
• C)Debt to equity ratio.
• D)Current ratio.

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Definitions:

Parent-subsidiary Relationship

A corporate structure relationship where one company (the parent) controls another company (the subsidiary) by holding a majority of its stock.

Substantive Rights

Rights that the rights holder has the practical ability to exercise.

ASIC

ASIC stands for Australian Securities and Investments Commission, a body that regulates financial markets, securities, futures, and corporations in Australia.

Non-reporting Entities

Businesses or organizations that are not required to prepare or submit financial reports to regulatory agencies or stakeholders.