Multiple-Choice Questions 1. What type of analysis is indicated by the following? Amount Percent Current assets $100,000 20% Property, plant and equipment 400,000 80% Total assets 5500,000 100% a. Vertical analysis c. Liquidity analysis b. Horizontal analysis d. Profitability analysis 2. The ability of a company to pay its debts is called: a earnings per share. C. profitability b. liquidity. d. solvency 3. The ratio that measures how much of a company is financed by debt and equity is the: a. current ratio. c. ratio of liabilities to stockholders b. ratio of fixed assets to long-term equity. liabilities d. price-earnings ratio. 4. The ratio that measures the "instant" debt-paying ability of a firm, by focusing on curre assets that can be easily converted to cash, is the: a. working capital. c. number of days' sales in inventory b. quick ratio. d. ratio of fixed assets to long-term liabilities. 5. A measure useful in evaluating efficiency in the management of inventories is the a. working capital. c. number of days' sales in inventor b. quick ratio. d. ratio of fixed assets to long-term liabilities