Question & Answer: Which of the following ratios is calculated using only balance sheet numbers?…..

Which of the following ratios is calculated using only balance sheet numbers?

Return on sales

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Asset turnover

Price earnings ratio

Current ratio

Expert Answer

 

D. Current ratio

Current ratio is calculated using only balance sheet numbers. It is calculated as:

Current ratio = Current assets / Current Liabilities

Current ratio is a liquidity ratio that measures a company’s ability to pay short-term and long-term obligations.

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