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Foundations of Financial Management Study Set 5
Quiz 3: Financial Analysis
A Short-Term Creditor Would Be Most Interested In
Question 9
Multiple Choice
A short-term creditor would be most interested in: A) profitability ratios. B) asset utilization ratios. C) liquidity ratios. D) debt utilization ratios.
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Q 10
If a firm has both interest expense and lease payments: A) times interest earned will be smaller than fixed charge coverage. B) times interest earned will be greater than fixed charge coverage. C) times interest earned will be the same as fixed charge coverage. D) fixed charge coverage cannot be compute
Q 11
ABC Co. has an average collection period of 60 days. Total credit sales for the year were $3,285,000. What is the balance in accounts receivable at year-end? (Use 365 days in a year.) A) $54,750 B) $109,500 C) $540,000 D) $547,500
Q 12
A firm has operating profit of $120,000 after deducting lease payments of $20,000. Interest expense is $40,000. What is the firm's fixed charge coverage? A) 6.00x B) 4.00x C) 3.50x D) 2.33x
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