Reference no: EM132656015
Problem 1: What measures the productivity level of a business?
Group of answer choices
Option 1: current ratio
Option 2: profit margin on revenue
Option 3: none of these
Option 4: average collection period
Option 5: total assets turnover
Problem 2: Which of the following is a debt-coverage ratio?
Group of answer choices
Option 1: times-interest-earned
Option 2: inventory turnover
Option 3: return on equity
Option 4: earnings per share
Option 5: none of these
Problem 3: Ford has a times-interest-earned ratio of 4.8 times, and Toyota has a times-interest-earned ratio of 5.3 times. What conclusions would Ford's chief financial officer arrive at looking at these numbers and Toyota's ratio?
Group of answer choices
Option 1: Toyota is in a better position to cover its interest costs than Ford.
Option 2: Ford is in a better position to pay interest than Toyota.
Option 3: None of these.
Option 4: The times-interest-earned ratio is of no interest to lenders because the ratios are so close together.