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Author Question: Which of the following is true of current ratio? A) The more predictable a firm's cash flows, the ... (Read 107 times)

PhilipSeeMore

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on: Jul 11, 2018
Which of the following is true of current ratio?
 
  A) The more predictable a firm's cash flows, the higher the acceptable current ratio.
  B) A higher current ratio indicates a higher return on equity.
  C) The more predictable a firm's current ratio, the higher the current liabilities.
  D) A higher current ratio indicates a greater degree of liquidity.

Question 2

The purpose of the restrictive debt covenant that limits the distribution of profits to shareholders is to ________.
 
  A) assure the lender that additional borrowing is constrained or may be subordinated to the original loan
  B) limit the amount of fixed-payment obligations
  C) ensure a cash shortage does not cause an inability to meet current obligations
  D) avoid default of payments to bondholders


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zhanghao

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Reply #1 on: Jul 11, 2018
Answer to Question 1

D

Answer to Question 2

D


PhilipSeeMore

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Reply 2 on: Jul 11, 2018
Thanks for the timely response, appreciate it

tranoy

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Reply 3 on: Yesterday
Wow, this really help

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