learning objective 15 4 1 the current ratio is widely used to measure a company 39 s 4311349

Learning Objective 15-4

1) The current ratio is widely used to measure a company's ability to pay current liabilities.

2) The inventory turnover ratio is a measure of the company's ability to pay all of its current liabilities if they come due immediately.

3) The inventory turnover ratio indicates how rapidly inventory is sold.

4) Days' sales in receivables is a measure of a company's ability to collect receivables.

5) Rate of return on net sales is a measure of a company's profitability.

6) The times-interest-earned ratio shows a creditor the firm's ability to pay interest on debt.

7) The current ratio is a key indicator of a company's ability to pay current liabilities.

8) Quick assets do NOT include inventory.

9) Merchandise inventory is NOT counted when computing the acid-test ratio.

10) The ratio of the market price of a share of stock to the dividends paid per share is called the earnings per share.

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