Because the assets included in the current ratio have different levels of liquidity that reflect different degrees of collectability, many companies use which of the following ratios to measure current liquidity?

A. Current ratio.

B. Working capital.

C. Quick ratio.

D. Debt ratio.

The average collection period reveals

A. how many days, on average, it takes between when an order is placed until the cash is collected.

B. how many days, on average, the company takes to collect cash from a credit sale.

C. how many days, on average, the company takes to collect past due accounts.

D. how many days, on average, it takes between when an original contact is made to collect an account until the cash is collected.

Generally a high inventory turnover rate is considered

A. good.

B. bad.

C. indifferent.

D. proportionate to net income.

A low inventory turnover might signal

A. a problem with old and obsolete inventory.

B. slow-moving inventory.

C. too much inventory.

D. a problem with old and obsolete inventory, slow-moving inventory, and too much inventory.