A banker may perform a financial ratio analysis to assess a firm's ability to repay debt in a timely manner.
Answer the following statement true (T) or false (F)
True
Ratio analysis involves studying various relationships between different items reported in a set of financial statements. Creditors are interested in whether a company will be able to repay its debts on time. Ratios are grouped into categories such as measures of debt-paying ability and measures of profitability.
You might also like to view...
Which of the following is not a viable strategy for liquidating markdown merchandise?
A. Sell at Internet auction. B. Adopt a keystoning strategy. C. Consolidate unsold merchandise. D. Return to vendor. E. Sell to another retailer.
Disc Company purchased equipment at the beginning of 2010 for $200,000. The company decided to depreciate the equipment over an 5-year period using the straight-line method. The company estimated the equipment's salvage value at $20,000. The journal entry to record depreciation expense for 2011 is a debit to:
A) depreciation expense and a credit to accumulated depreciation for $40,000. B) accumulated depreciation and a credit to equipment for $40,000. C) depreciation expense and a credit to equipment for $36,000. D) depreciation expense and a credit to accumulated depreciation for $36,000.
Which of the following is not likely to be a characteristic of an employment relationship associated with effective knowledge-sharing:
a. trust b. competition c. mutual respect d. honesty
The gold standard differed from the gold bullion standard in that the gold standard ________
A. used gold coins of standard specification B. was highly liquid C. backed paper currency with gold bullions D. did not use minted gold coins