Exercise 2 Directions/Instructions: Choose the correct financial ratio in the box that corresponds to the statements in each number. Write your answer from the space provided. Acid Test/Quick Ratio Debt/Equity Ratio Current Ratio Equity Ratio Cash Ratio Debt Ratio Gross Profit ratio Operating Ratio 2011s leloner9 Return on Assets Working Capital 1. It indicates the ability to pay current obligations. 2 It measures the company's ability to pay of its current liabilities if immediate payment were demanded. 3. Indicates the ability to pay current obligations from the more liquid current assets. 4. This measures the proportion of borrowed capital to invested Capital. 5. Shows how much of the total company assets are owned outright by the investors 6. Indicates what portion of total assets is provided by the maginn qlan or nodst creditors. 7. It shows the remaining amount of current assets that can be used in the operation. 8. Indicates what portion of sales is absorbed by operating costs 9. It computes the gross margin per peso of sales. Use in determining the adequacy of gross margin to cover operating expenses and desired profit. ntsnillot 10. Measures how efficiently a company manage its assets to produce profits during the period d nabl
Exercise 2 Directions/Instructions: Choose the correct financial ratio in the box that corresponds to the statements in each number. Write your answer from the space provided. Acid Test/Quick Ratio Debt/Equity Ratio Current Ratio Equity Ratio Cash Ratio Debt Ratio Gross Profit ratio Operating Ratio 2011s leloner9 Return on Assets Working Capital 1. It indicates the ability to pay current obligations. 2 It measures the company's ability to pay of its current liabilities if immediate payment were demanded. 3. Indicates the ability to pay current obligations from the more liquid current assets. 4. This measures the proportion of borrowed capital to invested Capital. 5. Shows how much of the total company assets are owned outright by the investors 6. Indicates what portion of total assets is provided by the maginn qlan or nodst creditors. 7. It shows the remaining amount of current assets that can be used in the operation. 8. Indicates what portion of sales is absorbed by operating costs 9. It computes the gross margin per peso of sales. Use in determining the adequacy of gross margin to cover operating expenses and desired profit. ntsnillot 10. Measures how efficiently a company manage its assets to produce profits during the period d nabl
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter5: Sales And Receivables
Section: Chapter Questions
Problem 87APSA
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Transcribed Image Text:Exercise 2
Directions/Instructions: Choose the correct financial ratio in the box that corresponds to the
space provided.
statements in each number. Write your answer from the
Acid Test/Quick Ratio
Debt/Equity Ratio
Current Ratio
Cash Ratio
Debt Ratio
Equity Ratio
Return on Assets
Operating Ratio
20116 lelaneni
Gross Profit ratio
Working Capital
1. It indicates the ability to pay current obligations.
2 It measures the company's ability to pay of its current liabilities
if immediate payment were demanded.
3. Indicates the ability to pay current obligations from the more
liquid current assets.
4. This measures the proportion of borrowed capital to invested
Capital.
5. Shows how much of the total company assets are owned
maganu qlan or nost
outright by the investors
6. Indicates what portion of total assets is provided by the
creditors.
7. It shows the remaining amount of current assets that can be
used in the operation.
8. Indicates what portion of sales is absorbed by operating costs
9. It computes the gross margin per peso of sales. Use in
determining the adequacy of gross margin to cover operating
expenses and desired profit.
ndtuniollo 10. Measures how efficiently a company manage its assets to
produce profits during the period
dw limabl
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