Ratios and Cost of Goods Sold

Liquidity ratios measure how well a hospitality business can pay off short-term debt

• True

• False

Current Ratio is calculated by:

• Total Liabilities/Total Assets

• Total Assets/Total Liabilities

• Total Current Liabilities/Total Current Assets

• Total Current Assets/Total Current Liabilities

A quick ratio of greater than 1 is less of a financial risk

• True

• False

The higher the debt/equity ratio, the more debt the company is using.

• True

• False

Cost of goods sold is directly associated with

• Revenue

• Profit Margin

• Inventory

• All of the answers are correct

Cost of Goods Sold is calculated by considering the:

• Beginning Inventory

• Ending Inventory

• Purchases

• All of the answers are correct