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ryzh [129]
3 years ago
12

Which of the following statements is true of the current ratio? The larger the current ratio, the harder it is for the firm to p

ay its short-term debts. A current ratio below 1.0 signifies a company's inability to pay its short-term liabilities with its current assets. Current ratio is classified under the leverage ratio. Current ratio is computed by dividing the firm's current liabilities by its current assets.
Business
1 answer:
kobusy [5.1K]3 years ago
8 0
The correct answer is this one: " A current ratio below 1.0 signifies a company's inability to pay its short-term liabilities with its current assets.<span>" It is the statement that presents a true description about the current ratio. Current ratio refers to the liquidity ratio in which the ability of the company is measured as to how they be able to pay short-term and long-term obligations.</span>
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which is true:_______A. high p/e ratio could mean that the company has a great deal of uncertainty in its future earningsB. low
kondor19780726 [428]

Answer:

1. Which Statement is true:

B. low p/e ratio could mean that the company has a great deal of uncertainty in its future earnings.

2. Qualitative analysis:

According to your understanding, a company with less competition is considered to be (more or less) risky than companies with a wide multiple competitors.

Explanation:

Company A's Price/Earnings (P/E) ratio is calculated as the market price of its shares divided by the earnings per share.  It shows the value investors have over a stock.  With a high P/E ratio, the company's stock could be over-valued, or investors are expecting high growth rates in the future.  This is unlike a low P/E ratio that shows that the stock is undervalued or that investors are not expecting high growth rates in the future because of uncertainty.

Without competition, Company A is riskier  than Company B which operates efficiently and competitively.  There is that competitive edge that competitive companies possess.  Monopolies do not enjoy that advantage.  It is, therefore, riskier to have no competition.

5 0
3 years ago
Cullumber Company has the following transactions during August of the current year. Aug. 1 Opens an office as a financial adviso
Flauer [41]

Answer:

  • Aug 1  Cash   $4000 Dr

                          Common Stock    $4000 C

  • Aug 4  Prepaid Insurance  $1500 Dr

                           Cash                           $1500 Cr

  • Aug 16  Cash   $400 Dr

                            Service Revenue    $400 Cr

  • Aug 27  Salary Expense   $1000 Dr

                            Cash                       $1000 Cr  

Explanation:

  • Aug 1.  The transaction relates to owner's investment in the business/company thus we debit the cash coming into the business and credit common stock as both are increasing.

  • Aug 4.  The insurance paid in advance is a current asset for the business. So, we debit the prepaid insurance account as the asset is increasing and credit the cash account as it is decreasing due to payment for insurance.

  • Aug 16.  400 received is the service revenue and as the revenue is increasing, we credit it. We are receiving cash so we debit the cash account.

  • Aug 27.  The payment of salary is an expense and as expense is increasing, we debit the salary expense account and credit the cash account as cash is decreasing.

3 0
3 years ago
When something is grown and harvested in the same country it is distributed in, it can be considered what?
Vinvika [58]

Answer:

domestic

Explanation:

In business, domestic refers to the home country of the producer or consumer. The domestic market is the market within the borders of the seller's country.  Domestic contrasts with international, which refers to beyond the borders of a country.

Products that are produced and distributed within the country are domestic products. They are often referred to as local products. Domestic goods become exports if sold outside the borders of their country of origin.

5 0
2 years ago
Jerry has an insurance policy with a premium of $150 per month. In June, he’s in an accident and receives a bill with a total co
bazaltina [42]

$250

COVERAGE LIMIT-DEDUCTIBLE = $4000-$1500 = 2500

$2500/10 = $250

3 0
2 years ago
Which of the following statements best explains why the red bar goes up when the blue goes up?
vesna_86 [32]

<u>Answer: </u>Higher spending than taxing results in a deficit, which contributes to more debt.

<u>Explanation:</u>

Here the red bar is referred to the debt and the blue bar is referred to the spending. When the government spending is more it decreases the government revenue and creates a deficit in the funds. When there is deficit it means the government borrows funds for spending which increases the debts.

Government spending to improve the status of the economy in the country. It Invests is various activities for growth and development purpose. Only on collecting high taxes the revenue of the government will increase. When taxes collected are low the government revenue is also low.

8 0
2 years ago
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