Which of the following statements is true?

A. Lower current ratios are always preferable.

B. Current assets are expected to be converted into cash in less than 2 years.

C. A firm's debt holders prefer a low quick ratio.

D. The quick ratio is classified as an activity ratio.

E. Activity ratios go hand in hand with liquidity ratios

Market ratios differ from other ratios because.

A. they are the most important ratios to shareholders.

B. they are based on information not contained in the firm's financial statements.

C. they are the only ratios that may have negative values.

D. they are less precise.

E. they are the only ratios that relate equity measures to other variables.

Which type of ratio measures the how effectively the firm uses its resources to generate income?

A. Profitability

B. Market

C. Activity

D. Leverage

E. Liquidity