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Match Each Ratio That Follows to Its Use (Items A-H)

Question 181

Matching

Match each ratio that follows to its use (items a-h). Items may be used more than once.

Premises:
current ratio
ratio of liabilities to stockholders' equity
dividends per share
earnings per share (EPS) on common stock
quick ratio
rate earned on total assets
working capital
ratio of sales to assets
price-earnings (P/E) ratio
rate earned on common stockholders' equity
Responses:
indicate future earnings prospects
assess the effectiveness in the use of assets
assess the profitability of the investment by common stockholders
indicate instant debt-paying ability
indicate the ability to meet currently maturing obligations
indicate the extent to which earnings are being distributed to common stockholders
assess the profitability of the assets
indicate the margin of safety to creditors

Correct Answer:

current ratio
ratio of liabilities to stockholders' equity
dividends per share
earnings per share (EPS) on common stock
quick ratio
rate earned on total assets
working capital
ratio of sales to assets
price-earnings (P/E) ratio
rate earned on common stockholders' equity
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