Julian and Marcus sit down to discuss the business's current

financial situation. Julian suggests using ratio analysis to

identify current strengths and weaknesses. Julian suggests

they calculate the current ratio, which is a$($n$)$

and is

found by

asset management ratio; dividing cost of

goods sold by average inventory levels

liquidity ratio; dividing current assets by

current liabilities

leverage ratio; dividing current assets by

current liabilities

profitability ratio; dividing cost of goods sold

by average inventory levels