Exercise $13-2$

Identifying financial ratios

C$1$

Identify which of the following six metrics a through f best completes questions $1$ through $3.$

a$.$ Days$$ sales uncollected

b$.$ Accounts receivable turnover

c$.$ Working capital

d$.$ Return on total assets

e$.$ Total asset turnover

f$.$ Profit margin

$1.$ Which two ratios are key components in measuring a company$$s operating efficiency? Which ratio summarizes these two components? $\_\_\_\_\_\_\_\_\_\_\_$

$2.$ What measure reflects the difference between current assets and current liabilities? $\_\_\_\_\_\_\_\_$

$3.$ Which two short$-$term liquidity ratios measure how frequently a company collects its accounts? $\_\_\_\_\_\_\_\_\_\_\_$