Answer the following statements true (T) or false (F)
1. A common rule of thumb is that a company's acid-test ratio should have a value near or higher than 1 to conclude that a company is unlikely to face near-term liquidity problems.
2. Successful use of a just-in-time inventory system can narrow the gap between the acid-test and the current ratio.
3. A company's quick assets are $147,000 and its current liabilities are $143,000. This
company's acid-test ratio is 1.03.
4. A company's current ratio is 1.2 and its quick ratio is 0.25. This company is probably an excellent credit risk because the ratios reveal no indication of liquidity problems.
5. The gross margin ratio is defined as gross margin divided by net sales.
1. TRUE
2. TRUE
3. TRUE
4. FALSE
5. TRUE
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Which of the following presents the proper ordering of assets, liabilities and equities on the statement of financial position used by some countries that is different from the U.S.?
a. current assets, long-term assets, current liabilities b. inventories, trade-receivables, cash c. assets, liabilities, equities d. current liabilities, long-term liabilities, equities
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A) believers B) strivers C) makers D) achievers
A/An ________ is a brief overview of the proposal's key points, geared toward a low-tech audience. It is usually 3 to 10 sentences in length
A) Purpose B) Abstract C) Executive