ACC 205 week 5 quiz (all correct)

Question 1. 1. The current ratio is considered a liquidity ratio. (Points : 1)

Question 2. 2. The Quick Ratio equals current assets divided by current liabilities. (Points : 1)

Question 3. 3. Debt service ratios determine a firm’s available cash flow to meet operating expenses. (Points : 1)

Question 4. 4. When performing a vertical analysis on a firms Income statement each financial figure is listed as a percentage of Cost of Goods Sold. (Points : 1)

Question 5. 5. Ratio analysis is a preferred method of analyzing a firm’s financial position because a firm cannot manipulate financial information that would impact the value of the ratios. (Points : 1)