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Which of the following measures would assist in assessing the liquidity of a company?


A) Cash coverage ratio
B) Fixed asset turnover ratio
C) Receivables turnover ratio
D) Times interest earned ratio

E) C) and D)
F) A) and B)

Correct Answer

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Liquidity measures the ability of a company to meet its current financial obligations.

A) True
B) False

Correct Answer

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Which of the following measures would assist in assessing the solvency of a company?


A) Debt-to-assets ratio
B) Fixed asset turnover ratio
C) Return on equity ratio
D) Quality of income ratio

E) None of the above
F) A) and C)

Correct Answer

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