CFA Practice Question
Which of the following ratios would NOT be useful to evaluate a company's operating efficiency?
A. Quick ratio
B. Fixed asset turnover and total asset turnover
C. Equity turnover
Explanation: Quick ratio = (cash + marketable securities + receivables)/current liabilities
It is used to evaluate a company's internal liquidity.
User Contributed Comments 3
| User | Comment |
|---|---|
| sheenalim | there's no such equity turnover ratio is there? i can't find it anywhere in the textbook and the LOS here. |
| sheenalim | ok i googled and equity turnover is annual sales / average stockholder's equity. measures the rate of return on common equity and how well a company uses its equity to generate revenue. |
| Rubbish | check up dupont formula |