Question

A bank is concerned because they feel that a firm will not be able to raise enough cash to pay bills that are due within the next year. What ratio are they most likely to examine to address this concern?

A. Selling and administrative expenses/Net sales

B. Net sales/Total assets

C. Current assets - Current liabilities

D. Net income/Total assets

E. Long-term debt/(Long-term debt + Net worth)

Answer

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