The conversion ratio is considered to be a(n) __________ ratio.
A) activity
B) liquidity
C) profitability
D) leverage
E) cash

Question

Quizplus · Accepted Answer

The conversion ratio is a measure of how many convertible securities (such as preferred stock or bond) can be converted into common shares. This is an activity ratio because it looks at the company's ability to convert its securities into common shares, which is an activity that can affect the company's financial position. The other answer choices are not applicable to this ratio.

The Conversion Ratio Is Considered to Be A(n) __________ Ratio