Asked by Karan Patel on Jun 18, 2024
Verified
What ratio will definitely increase when a firm increases its annual sales with no corresponding increase in assets?
A) asset turnover
B) current ratio
C) liquidity ratio
D) quick ratio
Asset Turnover
A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.
Quick Ratio
A measure of a company's capacity to meet its short-term liabilities with its most liquid assets.
Liquidity Ratio
A financial metric used to determine an entity's ability to pay off its short-term debts with its most liquid assets, indicating financial health.
- Analyze the impact of sales, assets, and liabilities on financial ratios and firm performance.
Verified Answer
Learning Objectives
- Analyze the impact of sales, assets, and liabilities on financial ratios and firm performance.
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