46.The operating cycle of a company:
A. Must be less than one year.
B. Is usually greater than one year.
C. Is the time it takes to purchase inventory, sell inventory, and collect cash from the sale.
D. Is the time it takes to acquire a loan, pay the interest, and retire the loan by paying the creditor in full.
47.The excess of current assets over current liabilities is called:
A. Current ratio.
B. Working capital.
C. Debt ratio.
D. Quick ratio.
48.Quick assets include which of the following?
A. Cash, marketable securities, and receivables.
B. Cash, marketable securities, and inventories.
C. Cash, prepaid rent, and receivables.
D. Market securities, receivables, and inventories.
49.The ratio which measures total liabilities as a percentage of total assets is called:
A. Current ratio.
B. Working capital.
C. Debt ratio.
D. Quick ratio.
50.The principle factor/s affecting the quality of working capital is/are:
A. The nature of the current assets.
B. The length of time to convert current assets into cash.
C. Both the nature of the current assets and the length of time to convert current assets into cash.
D. Neither the nature of the current assets nor the length of time to convert current assets into cash.
51.All of the following are measures of liquidity
except:
A. Quick ratio.
B. Debt ratio.
C. Current ratio.
D. Working capital.
52.Which of the following is a measure of short-term liquidity?
A. Quick ratio.
B. Return on assets.
C. Dividend yield.
D. Debt ratio.
53.The current ratio will be _______________ the quick ratio.
A. Less than
B. Greater than or equal to
C. The same as
D. Always different than
54.The measures most often used in evaluating solvency—the current ratio, quick ratio, and amount of working capital—are developed from amounts appearing in the:
A. Balance sheet.
B. Income statement.
C. Statement of retained earnings.
D. Statement of cash flows.
55.Which American industry would tend to have the greatest debt ratio?
A. Auto.
B. Retail clothing.
C. Manufacturing.
D. Banking.