Question $35(1$ point$)$

Financial ratio analysis is about quantitative analysis of a firm's financial statements. Which of the

following is correct about financial ratios?

A decline in the inventory turnover ratio suggests that the firm's liquidity position is improving.

Since ROA measures the firm's effective utilization of assets $($without considering how these

assets are financed$),$ two firms with the same EBIT must have the same ROA

A high times$-$interest$-$earned ratio is one indication that the firm should be able to meet its

debt obligations.

Having a high current ratio is always a good indication that a firm is managing its liquidity

position well.