56. Which of the following is not a measure of profitability? 
A. EPS.
B. ROI.
C. ROE.
D. NLR.

57. Which American industry would tend to have the greatest debt ratio? 
A. Auto.
B. Retail clothing.
C. Manufacturing.
D. Banking.

58. The current ratio: 
A. Is computed by dividing current assets by current liabilities.
B. Is computed by subtracting current liabilities from current assets.
C. Remains unchanged throughout the operating cycle.
D. Is a measure of short-term profitability.

59. Component percentages indicate the relative size of each item included in a total. Which of the following statements is true? 
A. Income statement items are expressed as a percentage of net income, while balance sheet items are expressed as a percentage of total assets.
B. Income statement items are expressed as a percentage of net sales, while balance sheet items are expressed as a percentage of total assets.
C. Income statement items are expressed as a percentage of net income, while balance sheet items are expressed as a percentage of net worth.
D. Both income statement and balance sheet items are expressed as a percentage of net worth.

60. How would a company's working capital be affected if a substantial amount of accounts payable were paid in cash? 
A. It would be unaffected.
B. It would fall.
C. It would increase.
D. The change would depend on the relationship between the payables liquidated and current liabilities.

61. Current assets are those assets that can be converted into cash within: 
A. One year and never longer.
B. One year or the operating cycle, whichever is longer.
C. One year or the operating cycle, whichever is shorter.
D. Management's discretion.

62. The current ratio is calculated by: 
A. Dividing current assets by total assets.
B. Dividing current assets by total liabilities.
C. Dividing current assets by stockholders' equity.
D. Dividing current assets by current liabilities.

63. The quick ratio: 
A. Is computed by dividing current assets by current liabilities.
B. Is always higher than the current ratio.
C. Cannot be higher than the current ratio.
D. May be higher or lower than the current ratio.

64. Short-term creditors are most likely to use the quick ratio instead of the current ratio in evaluating the solvency of a company with large, slow-moving: 
A. Plant and equipment.
B. Receivables.
C. Inventories.
D. Employees.

65. Which of the following is considered a quick asset? 
A. Accounts receivable.
B. Inventory.
C. Automobiles.
D. Prepaid expenses.