The use of secondary sources of liquidity would most likely be considered:
A normal part of daily business for a company.
B. A signal that a companys financial position is deteriorating.
C. A lower-cost source of short-term financing compared to primary sources of liquidity.
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An example of a primary source of liquidity is:
A. Liquidating assets.
B. Negotiating debt contracts.
C. short-term investment portfolios.
Firm A and Firm B have the same quick ratio, but Firm A has a greater current ratio than Firm B. Compared to Firm B, it is most likely that Firm A has:
A. Greater inventory.
B. Greater payables.
C. A higher receivables turnover ratio.
Which of the following would least likely be an indication of poor corporate governance?
A board member leases office space to the company in a building he owns.
B. There are board members who do not have previous experience in the industry in which the firm operates.
C. A board member has a consulting contract with the firm to provide strategic vision for the technology research and development effort.
A firms debt-to-equity ratio is most likely to increase as a result of a(n):
A. Extra dividend.
B. Stock dividend.
C. Purchase of a machine for cash.