Which of the following statements is true?
A) Liquidity focuses on the ability of a company to pay their long- and short-term debts.
B) The inventory turnover ratio is an important solvency test for retail companies.
C) Tests of profitability focus on measuring the adequacy of profit.
D) The debt to equity ratio is a measure of liquidity.

Question

Quizplus · Accepted Answer

Tests of profitability focus on measuring the adequacy of profit, assessing how well a company generates earnings relative to its expenses and other costs.

Which of the Following Statements Is True