1) Which ratio measures the ability of a company to pay its current debts?

A. Current ratio

B. Inventory turnover ratio

C. Return on assets

D. Days' sales in receivables

2) Which ratio measures the ability of a company to collect its receivables?

A. Current ratio

B. Quick ratio

C. Days' sales in receivables

D. Return on assets

3) A statement that lists the assets, liabilities, and stockholders' equity of a company in percentages only with no dollar amounts is a

A. common-size income statement.

B. benchmarking analysis.

C. common-size balance sheet.

D. horizontal analysis.

4) To calculate the debt ratio, total liabilities should be divided by

A. total assets.

B. total stockholders' equity.

C. interest expense.

D. income from operations.

5) Which of the following ratios measures a company's profitability?

A. Rate of return on net sales

B. Days' sales in receivables

C. Times-interest-earned

D. Current ratio