Efficiency Ratios

The number of times during an operating period that the average inventory was sold.

• working capital
• return on investment
• inventory turnover
• debt-to-assets ratio

Indicates a firm's ability to quickly liquidate assets to pay off current debts.

• asset turnover ratio
• inventory turnover
• debt-to-assets ratio
• acid test/liquid capital ratio

The comparison of a firm's current assets to current liabilities. The ratio indicates the amount of current assets available to pay off $1 of current debt.

• acid test/ quick ratio
• asset turnover ratio
• current ratio
• inventory turnover

A comparison between two numbers showing how many times one number exceeds the other.

• return on investment
• profitability ratios
• ratio
• efficiency ratios

Indicates how quickly a firm's credit accounts are being collected and is a good measure of how efficiently a firm is managing its accounts receivable.

• trade receivable days

• efficiency ratios
• working capital
• current ratio

The amount of profit generated by the firm in relation to the amount invested by the owners.

• return on capital employed

• ratio
• working capital
• inventory turnover

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the: 

• Balance Sheet
• Statement of Retained Earnings
• Statement of Cash Flows
• Statement of Comprehensive Income

What is the formula for Gross Profit Margin

• Profit / Net sales revenue X 100

• Gross profit / sales revenue X 100

• Gross profit / Cost of sales X 100

• Profit / Cost of sales X 100

The difference between current assets and current liabilities at a point in time. The amount of money that would be left over if all the current liabilities were paid off by current assets. 

• current ratio
• working capital
• acid test/ quick ratio
• asset turnover ratio

Company A has a current ratio of 3:1. This means that

• it has three times more assets than liabilities

• it has three times more liabilities than assets

• it has three times more currants than raisins