CFA Practice Question

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CFA Practice Question

Which of the following would not be regarded as one of the key ratios that would be used to analyze a firm's ability to pay its debts?

A. interest coverage ratios
B. equity turnover ratio
C. current ratio
Correct Answer: B

Equity turnover is defined as sales over average shareholder's equity. While this ratio is important in any analysis involving a firm, it wouldn't be regarded as a priority in conducting a credit or liquidity analysis.

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