D076 Pre-Assessment 2024-2025. Questions
and Correct, Verified Answers. Graded A+
(also called efficiency ratios) measure how well the company uses its assets to
generate sales or cash—the firm's operational efficiency and profitability. -
ANSActivity ratios A company currently has a ratio of 1.5 but hopes to improve the
ratio to 2 to align more with the industry benchmark. To achieve this goal, costs
were cut in production through an investment in efficient equipment, and the
company achieved a higher profit margin. If this continues, you are certain that the
firm will achieve its goal in two years. What is this an example of? - ANSProgress
measurement A firm has paid off its short-term loans more quickly in the past couple
of years. What might this trend indicate about the firm's financial ratios? - ANSIts
liquidity ratio is increasing. An investment analyst is concerned about a construction
company's ability to sell its inventory to meet current obligations, because much of
the inventory (commercial buildings) it builds and sells takes longer than a year to
construct. Which ratio should this analyst use to consider the effect of the firm's
inventory on the firm's ability to meet current obligations? - ANSquick ratio An
investment analyst is concerned about a construction company's ability to sell its
inventory to meet current obligations, because much of the inventory (commercial
buildings) it builds and sells takes longer than a year to construct. Which ratio should
this analyst use to consider the effect of the firm's inventory on the firm's ability to
meet current obligations? - ANSQuick ratio Another name for debt or liability -
ANSLeverage are used to evaluate the current share price of a public firm's stock. -
