Practice - Summary
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Practice Questions
Test your understanding with targeted questions
What do liquidity ratios measure?
💡 Hint: Think about obligations due soon.
Define profitability ratios.
💡 Hint: Consider profit in relation to sales.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What do liquidity ratios assess?
💡 Hint: Consider what obligations need to be met soon.
True or False: Higher profitability ratios indicate a less efficient company.
💡 Hint: Think about what profit relative to sales indicates about efficiency.
1 more question available
Challenge Problems
Push your limits with advanced challenges
A company has a current asset of $500,000 and current liabilities of $300,000. Another company in the same industry has a current asset of $200,000 and current liabilities of $100,000. Which company is in a better liquidity position? Explain your reasoning.
💡 Hint: Use the current ratio formula to calculate.
If a company's total debt is $600,000 and its equity is $400,000, what is its debt-to-equity ratio? Discuss the implications of this ratio in terms of financial risk.
💡 Hint: Think about how debt influences overall company financial stability.
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