Question : Which of the following answers is correct? A: The average collection period can be used to assess credit and collection policies. B: The solvency ratios provide critical information for the firm's long-term operation.
Option 1: Option A
Option 2: Option B
Option 3: Both of the above
Option 4: None of the above
Correct Answer: Both of the above
Solution : The average collection period is the number of days it takes for a company to collect and convert its accounts receivable into cash. The Solvency Ratio is one of several ratios used to evaluate a company's ability to repay long-term debts. The solvency ratios provide critical information to the firm's long-term operations. Hence option C is the correct answer.
Question : Which ratios provide information critical to the firm's long-term operation?
Question : Which of the following best describes the intent or goal of financial analysis?
Question : Trade Payables Turnover Ratio could be converted into_______________which indicates the period which is normally taken by the firm to make payment to its trade payable
Question : The liquidity ratio is also called________?
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile