1. What ratio can be used to inefficient buying habbits?
inventory turnover ratio gross margin ratio equity multiplier debt ratio
2. A ratio that compares investors’ and creditors’ stake in a company.
debt ratio debt to equity ratio equity ratio investor creditor ratio
3. The ratio that explains how efficiently companies use their assets to generate revenue.
revenue asset ratio receivables turnover ratio income ratio asset turnover ratio
4. What does the accounts receivable turnover ratio tell us?
how often A/R is received how many times average A/R is collected A/R balance is at the end of a period bad debt balances at year end
5. The best ratio to evaluate short-term liquidity is:
current ratio working capital cash ratio debt to assets ratio
6. The DuPont Analysis uses the following ratios except:
debt ratio profit margin total asset turnover financial leverage
7. Which best describes the gross margin ratio?
leverage ratio liquidity ratio coverage ratio profitability ratio
8. Inventory turnover ratio evalulates:
a company’s ability to move inventory a company’s inventory purchasing efficiency both A and B none of the above
9. The equity multiplier helps creditors:
evaluate future earnings evaluate company cash flows evaluate company profitability evaluate company lending risk
10. The quick ratio formula uses which of the following
total assets cash total current assets inventory
