Answer each of True or False questions below:
Normally, an analyst would believe that a garment company with a current ratio T or F
of 3 to 1 was in serious liquidity trouble
The acid test ratio is regarded primarily as a measure of a company’s long term liquidity T or F
Gross Profit Margin is a measure of the profit percentage per dollar of sales T or F
Inventory Turnover is computed by dividing cost of goods sold by total assets T or F
Normally a relatively low Inventory Turnover is desirable T or F
The Current Ratio is regarded as fundamental measurement of a company’s liquidity T or F
The Debt to Asset ratio measures the extent to which borrowed funds have been used to finance T or F
the acquisition of assets
The four classifications of ratio analysis are liquidity ratios, fixed asset ratios, profitability ratios and T or F
efficiency ratios
A Quick Ratio of 1.5 to 1 is normally considered satisfactory T or F
Liquidity ratios measure the ability of a business to meet long term obligations T or F