[amp_mcq option1=”a-2, b-4, c-3, d-1″ option2=”a-3, b-2, c-1, d-4″ option3=”a-3, b-1, c-4, d-2″ option4=”a-4, b-3, c-2, d-1″ correct=”option3″]<\/p>\n
The correct answer is: C. a-3, b-1, c-4, d-2<\/p>\n
Debtor’s turnover ratio<\/strong> is an activity ratio that measures how efficiently a company collects its receivables. It is calculated by dividing net credit sales by average accounts receivable. A higher ratio indicates that a company is collecting its receivables more quickly.<\/p>\n Proprietary ratio<\/strong> is a solvency ratio that measures the amount of equity that a company has relative to its debt. It is calculated by dividing total equity by total assets. A higher ratio indicates that a company has a stronger financial position.<\/p>\n Operating ratio<\/strong> is an efficiency ratio that measures how efficiently a company generates sales. It is calculated by dividing operating expenses by net sales. A lower ratio indicates that a company is more efficient in generating sales.<\/p>\n Acid test ratio<\/strong> is a liquidity ratio that measures a company’s ability to meet its short-term obligations. It is calculated by dividing quick assets by current liabilities. A higher ratio indicates that a company has a stronger liquidity position.<\/p>\n Profitability ratio<\/strong> is a measure of a company’s profitability. It is calculated by dividing net income by net sales. A higher ratio indicates that a company is more profitable.<\/p>\n I hope this helps! Let me know if you have any other questions.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”a-2, b-4, c-3, d-1″ option2=”a-3, b-2, c-1, d-4″ option3=”a-3, b-1, c-4, d-2″ option4=”a-4, b-3, c-2, d-1″ correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-58308","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"\n