A quick ratio that is much smaller than the current ratio reflects
A. a small portion of current assets is in inventory.
B. a large portion of current assets is in inventory.
C. that the firm will have a high inventory turnover.
D. that the firm will have a high return on assets.
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An increasing average receivables collection period indicates
A. the firm is generating more income.
B. accounts receivable are going down
C. the company is becoming more efficient in its collection policy.
D. the company is becoming less efficient in its collection policy
Which of the following is a potential problem of utilizing ratio analysis?
A. Trends and industry averages are historical in nature.
B. Financial data may be distorted due to price-level changes.
C. Firms within an industry may not use similar accounting methods.
D. All of the options.
Ratios are used to compare different firms in the same industry.
A. 对
B. 错
Financial ratios are used to weigh and evaluate the operational performance of the firm.
A. 对
B. 错