1. A person is in the market for a new car. Because they plan to keep the car for a long time, they would like to buy the car from a company that they think will exist for a long time. Which of the following ratios would be most useful in their decision-making process?

a. Acid-test ratio

b. Debt to total assets ratio

c. Profit margin ratio

d. Price-earnings ratio

2. A person has some money that they would like to invest in the stock of a company. They would like to invest in a company that is currently profitable. Which of the following ratios would be most useful in their decision-making process?

a. Debt to equity ratio

b. Earnings per share ratio

c. Current ratio

d. Dividend yield ratio

3. A person has some money that they would like to invest in the stock of a company. They would like to invest in a company that is currently profitable. Which of the following ratios would NOT be useful in their decision-making process?

a. Profit margin ratio

b. Inventory turnover ratio

c. Return on total assets ratio

d. Earnings per share ratio

4. ABC Corp. has been asked to supply inventory to XYZ Inc. ABC Corp. is trying to decide whether or not to take the job. ABC Corp. is concerned about XYZs ability to pay their bill. Which of the following ratios would be most useful in the suppliers decision-making process?

a. Asset turnover ratio

b. Debt to equity ratio

c. Acid-test ratio

d. Payout ratio