Question #7 Ratio Analysis Answer each of the ten (10) True or False questions below (1 point each): A. The Current Ratio is regarded as fundamental measurement of a company's liquidity 8. Normaly, an analyst would beieve tbat agameny with a curent ratio C. The acid test ratio is regarded primarily as a measure of a company's long term liquidity D. Usually a Quick Ratio of 1.5 to 1 is considered satisfactory E. Inventory Turnover is computed by dividing cost of goods sold by total assets F. Normally a relatively low Inventory Tunover is desirable G. Gross Profit Margin is a measure of the profit percentage per dollar of sales H. The four classifications of ratio analysis are liquidity ratio, fixed asset ratio, profitability ratio and T or F T or F T or F T or F T or F T or F T or F T or F efficiency ratios Liquidity ratios measure the ability of a business to meet long term obligations The Debt to Asset ratio measures the extent to which borrowed funds have been used to finance I. T or F J. T or F the acquisition of assets