ABM- Assessment

It is a key financial metric used to determine the sustainability of a company's dividend payments.

• Pay out ratio
• Plow back ratio
• Dividend

It  is a measure of what size a company's dividends should be

• Payout ratio
• Dividend
• Current ratio

It is the percentage of income that a company reinvests into its own operations. In other words, it is the percentage of net income that a company does not payout as dividends.

• Plow-back ratio
• Payout ratio
• Dividend

It is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations.

• Current ratio
• Quick ratio
• Debt ratio

The current ratio is calculated by dividing current assets by current liabilities.

• True
• False

The current ratio helps investors and creditors understand the liquidity of a company and how easily that company will be able to pay off its current liabilities.

• True
• False

The equity ratio highlights two important financial concepts of a solvent and sustainable business.

• True
• False

The equity ratio is calculated by dividing total equity by total assets.

• True
• False

The gross profit ratio is important because it shows management and investors how profitable the core business activities are without taking into consideration the indirect costs.

• True
• False

The gross profit formula is calculated by subtracting total cost of goods sold from total sales.

• True
• False