9.Thecurrentratioandinventoryturnoverratiomeasuretheliquidityof a firm.Thecurrentratiomeasurestherelation of afirm'scurrentassetstoits currentliabilitiesandtheinventoryturnoverratiomeasureshowrapidlyafirmturnsitsinventorybackintoa"quick"assetor cash. a.True b.False False ANSWER: Easy DIFFICULTY: Liquidityratios TOPICS: 10.Ifafirmhashighcurrentandquickratios,thisalwaysisagoodindicationthat afirmis managingitsliquidityposition well. a.True b.False False ANSWER: Easy DIFFICULTY: Currentratio TOPICS: 11.A declinein theinventoryturnoverratiosuggeststhat thefirm'sliquiditypositionisimproving. a.True b.False False ANSWER: Easy DIFFICULTY: Inventoryturnoverratio TOPICS: 12.Thedegreetowhichthemanagersofa firmattempttomagnifythereturnstoowners'capitalthroughtheuseof financialleverageiscapturedindebtmanagementratios. a.True b.False True ANSWER: Easy DIFFICULTY: Debtmanagementratios TOPICS:
9.Thecurrentratioandinventoryturnoverratiomeasuretheliquidityof a firm.Thecurrentratiomeasurestherelation of afirm'scurrentassetstoits currentliabilitiesandtheinventoryturnoverratiomeasureshowrapidlyafirmturnsitsinventorybackintoa"quick"assetor cash. a.True b.False ANSWER: False DIFFICULTY: Easy TOPICS: Liquidityratios 10.Ifafirmhashighcurrentandquickratios,thisalwaysisagoodindicationthat afirmis managingitsliquidityposition well. a.True b.False ANSWER: False DIFFICULTY: Easy TOPICS: Currentratio 11.A declinein theinventoryturnoverratiosuggeststhat thefirm'sliquiditypositionisimproving. a.True b.False ANSWER: False DIFFICULTY: Easy TOPICS: Inventoryturnoverratio 12.Thedegreetowhichthemanagersofa firmattempttomagnifythereturnstoowners'capitalthroughtheuseof financialleverageiscapturedindebtmanagementratios. a.True b.False ANSWER: True DIFFICULTY: Easy TOPICS: Debtmanagementratios
Test-Bank-CFIN-4-4th-Edition-Besley.docx