Select all true statements

Question 1 options:

	Every firm that has a current ratio above the industry average, also must have a quick ratio above average.
	A quick ratio that is many times above a benchmark could indicate that the firm is holding too much cash
	A current ratio of 3 is always a good thing.
	A current ratio well below average could be a sign of trouble

Select all true statements

Question 2 options:

	as long as two firms are classified in the same industry, financial ratios can be compared directly
	the presence of many lines of business impacts aggregate ratios of a firm
	ratios can only be used in conjunction with some benchmark
	accounting differences could impact the comparison of ratios across firms

select all true statements

Question 3 options:

	an inventory turnover above the benchmark is, generally, a good thing
	inventory turnover is defined as net sales divided by inventory
	activity ratios are also called liquidity ratios
	a firm has a total asset turnover of 1.5x. This could be interpreted as the firm being able to generate $1.50 in sales for every $1 of total asset

Select all true statements

Question 4 options:

	If you were a evaluating a firm's ability to repay a loan, you would find the Times Interest Earned ratio more useful than the Market to Book ratio
	Return on Assets is a an important ratio for assessing a firm's solvency
	A debt to assets ratio above the industry average is always a good sign of strong solvency
	A degree of financial leverage can be good for a healthy firm