1. The current ratio measures how easily current bills can be paid. It is calculated by dividing current assets by ________________.

   		investors equity
   		current liabilities
   		net income
   		property, plant and equipment

1.5 points

QUESTION 7

1. The quick ratio is similar to the current ratio except that removes ______________ from the calculation.

   		current assets
   		current liabilities
   		cash
   		inventory and other illiquid assets

1.5 points

QUESTION 8

1. The debt/equity ratio is important becuase it essentially shows how much of the company's capital (money to work with) comes from equity and how much comes from debt.

   True

   False

1.5 points

QUESTION 9

1. The interest coverage ratio measures how well a company can pay its total liabilities.

   True

   False

1.5 points

QUESTION 10

1. Inventory turns measures how many times inventory is sold and replenished (turned over) during a given period of time.

   True

   False