MATCHING &DEFINITION; For each of the ratios listed below, indicate by the appro

ID: 2431355 • Letter: M

Question

MATCHING &DEFINITION; For each of the ratios listed below, indicate by the appropriate code letter, whether it is a liquidity ratio, a profitability ratio, or a solvency ratio Code LLiquidity ratio PProfitability ratio s Solvency ratico 1. Price-earnings ratio 2. Asset turnover 3. Receivables turnover 24. Earnings per share 5. Payout ratio 6. 7. 8. Current ratio Acid-test ratio Debt to total assets ratio 9. Times interest earned 10. Inventory turnover Match the ratios with the appropriate ratio computation by entering the appropriate letter in t space provided. A. Current ratio B. Acid-test ratio C. Profit margin D. Asset turnover E. Price-earnings ratio F. Times interest earned G. Inventory turnover H. Average collection period I. Days in inventory J. Payout ratio

Explanation / Answer

Solution:

Price-earning ratio

Asset turnover

Receivable turnover

Earning per share

Payout ratio

Current ratio

Acid-test ratio

Debt to total assets ratio

Time interest earned

Inventory turnover

Explanation:

A profitability ratio is a measure of profitability, which is an approach for measuring a company's performance

Solvency ratio measure the company's ability to meet its long term debts

A liquidity ratio measures whether current assets of a company will be sufficient to meet the company's obligations when they become due