Company B shows that 46 percent of its assets are financed by creditors. Which of the following
Question:
Company B shows that 46 percent of its assets are financed by creditors. Which of the following shows this result?
a. Current ratio
b. Times-interest-earned
c. Return on sales
d. Inventory turnover in days
e. Debt ratio
Step by Step Answer:
The correct answer is e Debt ratio The debt ratio is a financial ratio that me...View the full answer
Cornerstones of Managerial Accounting
ISBN: 978-0324660135
3rd Edition
Authors: Mowen, Hansen, Heitger
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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