Quiz Ch 14 – Identifying Liquidity Ratios
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
Which ratio is NOT considered a liquidity ratio?
Which ratio is NOT considered a liquidity ratio?
What effect does a higher borrowing rate compared to ROA have on ROE?
What effect does using debt have on a firm’s ROE when the interest rate on debt is higher than the ROA?
How do the reporting of depreciation and interest expense affect the level of real income during periods of low inflation?
Which ratio will experience a definite rise when a firm boosts its annual sales without increasing assets?
What effect does using LIFO instead of FIFO have on ROE?
Which transaction reduces cash flow from investments?
Which action will cause a decline in cash flow from operations?
What is the common belief regarding why firms “manage” their income statements?
Which option will lead to a rise in cash for the company?