EQL216 2

Ratios help an investor to see the company’s performance.

• True

• False

_______ Ratio is an indication of a company’s healthy short-term liquidity. 

• Quick

• Current

The main difference between current ratio and _______ is inventory.

• earnings per share

• quick ratio

Quick ratio indicates that the company has enough to money to pay its bills and continue operating.

• True

• False

Earnings Per Share (EPS) is a measure of the profitability of a company.

• True

• False

EPS is calculated by dividing total earnings by outstanding shares.

• True

• False

Current assets= $60 million and the Current liabilities= $30 million. What is the current ratio?

• 2

• 4

EPS indicates the profitability of the company.

• True

• False

The calculation for the quick ratio is current assets minus inventory minus prepaid expenses divided by current liabilities.

• True

• False