Which of the following statements about the current ratio $($Current Assets$/$Current Liabilities$)$ is true?

$$ The current ratio is another name for the quick ratio.

The current ratio is a relative measure of a firm's liquidity.

Lenders prefer a relatively low current ratio for comfort.

The current ratio is a relative measure of a firm's value.

Question $27$

$3\mathrm{.}33$ pts

What does an increasing days sales outstanding $(=365/($Sales $/$ Accounts Receivable$))$ suggest about a firm's credit policy?

The credit policy is too restrictive.

Days sales outstanding has no relationship to a firm's credit policy.

The firm is probably losing qualified customers.

The credit policy may be too lenient.

Question $28$

$3\mathrm{.}33$ pts

Which of the following measures of EPS takes into account all potential shares that could be created from things like stock options, convertible bonds, and other convertible securities$?$

Pro forma EPS

Basic EPS

$$ Diluted EPS