Match the ratio to the building block of financial statement analysis to which it best relates.
A. Liquidity and efficiency
B. Solvency C. Profitability
D. Market prospects
1. _______ Gross margin ratio
2. _______ Acid-test ratio
3. _______ Equity ratio
4. _______ Return on total assets
5. _______ Dividend yield
6. _______ Book value per common share
7. _______ Days\u2019 sales in inventory
8. _______ Accounts receivable turnover
9. _______ Debt-to-equity
10. _______ Times interest earned<\/p>\n\n\n\n
The correct answer and explanation is:<\/mark><\/strong><\/p>\n\n\n\n Match the ratio to the building block of financial statement analysis to which it best relates.A. Liquidity and efficiencyB. Solvency C. ProfitabilityD. Market prospects1. _______ Gross margin ratio2. _______ Acid-test ratio3. _______ Equity ratio4. _______ Return on total assets5. _______ Dividend yield6. _______ Book value per common share7. _______ Days\u2019 sales in inventory8. _______ Accounts […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-186612","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/186612","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=186612"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/186612\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=186612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=186612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=186612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Answers:<\/h3>\n\n\n\n
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\n\n\n\nExplanations:<\/h3>\n\n\n\n
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This ratio shows the percentage of revenue remaining after deducting the cost of goods sold (COGS). It evaluates how effectively a company manages production costs relative to sales, highlighting profitability.<\/li>\n\n\n\n
This measures a company\u2019s ability to cover immediate liabilities with its most liquid assets. It focuses on short-term financial health, excluding inventory.<\/li>\n\n\n\n
The equity ratio measures the proportion of assets financed by shareholders\u2019 equity, assessing long-term financial stability and reliance on debt.<\/li>\n\n\n\n
This ratio evaluates how efficiently a company generates profit using its total assets, reflecting operational success.<\/li>\n\n\n\n
This ratio indicates how much a company pays in dividends relative to its share price. It\u2019s essential for investors assessing returns on investment.<\/li>\n\n\n\n
It reflects the per-share equity available to common shareholders, aiding investors in comparing market value to intrinsic value.<\/li>\n\n\n\n
This measures how quickly inventory is converted into sales, indicating efficiency in inventory management.<\/li>\n\n\n\n
This ratio shows how efficiently a company collects receivables, reflecting cash flow and credit policies.<\/li>\n\n\n\n
It measures the proportion of debt and equity in financing assets, providing insights into financial leverage and risk.<\/li>\n\n\n\n
This measures a company\u2019s ability to meet interest obligations with operating income, highlighting financial stability in managing debt.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"