1. Debt-to-equity and debt-to-assets ratios indicate the relative liquidity of a company. True or false.

2. The inventory turnover ratio is one indicator of a firms's operation efficiency. typically faster turns means that management is doing a better job or controlling inventory. True or false?

3. Two major elements of return on assets are profit margin and assets turnover an analysis of these two component parts can provide valuable insights into a firm's performance. True or false?

4. A company's operating cycle is a measurement of the average lenght of time from the point of sale to the collection of an account receivable. this measure is an important tool used in measuring operating efficiency and in forecasting the cash requirements of the firm. True or False.

5. Horizontal and vertical analysis are two key techniques used in analyzingfinancial statements, usually applied in tandem. Briefly stated, vertical analysisrequires that a significant element be measured as a percentage of a base towhich it is related. For example, the various components of an incomestatement might be measured as a percentage of sales. This technique can beapplied to the balance sheet as well. True or False?