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Nelly Inc. reported net credit sales of $24,000,000 and cost of goods sold of $18,000,000 for the year. The average inventory for the year was $6,000,000.
-Some of the ratios that are used to determine a company's short-term debt paying ability are
A) asset turnover, times interest earned, current ratio, and receivables turnover.
B) times interest earned, inventory turnover, current ratio, and receivables turnover.
C) times interest earned, current ratio, and inventory turnover.
D) current ratio, receivables turnover, and inventory turnover.

Question

Quizplus · Accepted Answer

The current ratio, receivables turnover, and inventory turnover are key ratios used to assess a company's short-term debt-paying ability. These ratios help evaluate liquidity and efficiency in managing assets.

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