Choose one out of the $6$ questions below. Explain your response in a paragraph or two. This isn't

automatically graded $($except being marked correct$)$ and so you need to make sure what you write

makes sense.

What are the major sources of financial information for publicly owned corporations?

The higher the accounts receivable turnover rate, the better off the company is$.$ Do you agree?

Why?

Can you think of a situation where the current ratio is very misleading as an indicator of short$-$

term, debt$-$paying ability? Does the acid$-$test ratio offer a remedy to the situation you have

described? Describe a situation where the acid$-$test ratio does not suffice either.

Through the use of turnover rates, explain why a firm might seek to increase the volume of its

sales even though such an increase can be secured only at reduced prices.

Indicate which of the relationships illustrated in the chapter would be best to judge:

The short$-$term debt$-$paying ability of the firm. The overall efficiency of the firm without regard to the

sources of assets. The return to owners $($stockholders$)$ of a corporation. The safety of long$-$term

creditors' interest. The safety of preferred stockholders' dividends.

$6$ Cite some of the possible deficiencies in accounting information, especially regarding its use in

analyzing a particular company over a $10-$year period.