Answer the following statements true (T) or false (F)
1. To compute the quick ratio, accounts receivable are not included in current assets.
2. Asset utilization ratios can be used to measure the effectiveness of a firm's managers.
3. Ratios are not misleading by inflation.
4. Profitability ratios are distorted by inflation because profits are stated in current dollars, while assets and equity are stated in historical dollars.
5. As long as prices of products continue to rise faster than costs in an inflationary environment, reported profits will generally continue to rise.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
5. TRUE
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