Indicate whether the following statements are true or false:

(i) Current ratio and acid-test ratio of a business firm are virtually the same; this implies that the firm has low investment in inventory.

(ii) A company’s current ratio is 2.0. If it uses cash to pay creditors, this transaction would cause a decrease in current ratio.

(iii) Solvency ratios measure the firm’s ability to cater to the obligations arising out of longterm debt.

(iv) Equity funds are greater than equity capital in a loss-incurring firm.

(v) In general, low turnover ratios are desirable.

(vi) Earnings yield is determined dividing EPS by acquisition price per equity share.

(vii) Return on equity funds is determined by dividing EAT by average net worth.

(viii) Internal growth rate is the maximum rate at which the firm can grow without external financing of any kind.

(ix) The sustainable growth rate is the maximum rate at which the company can grow by using retained earnings.

(x) It is conceptually correct to determine stock turnover ratio (finished goods) by dividing cost of goods sold by average stock.