Asked by Anthony Amaya on Jun 08, 2024
Verified
Which of the following ratios is not an indicator of a company's short-term financial strength?
A) Quality of income.
B) Current ratio.
C) Cash ratio.
D) Quick ratio.
Quality of Income
A measure of how easily accounting income can be converted to cash, indicating the reliability of earnings.
- Comprehend the manner in which various financial ratios and their elements reflect the financial condition of a corporation.
Verified Answer
TD
Taylor DouglasJun 11, 2024
Final Answer :
A
Explanation :
Quality of income is not a ratio that directly measures a company's short-term financial strength. It evaluates the sustainability and reliability of a company's earnings over the long term. The other three ratios listed (current ratio, cash ratio, and quick ratio) are all indicators of a company's short-term financial strength.
Learning Objectives
- Comprehend the manner in which various financial ratios and their elements reflect the financial condition of a corporation.