Which of the following ratios is difficult for creditors of a firm to analyze because the data are usually not available in published financial statements?
A) Financial leverage.
B) Average payment period.
C) Quick ratio.
D) Average age of inventory.

Question

Quizplus · Accepted Answer

Average payment period is a ratio that reflects the average number of days it takes a firm to pay its suppliers. It is difficult for creditors to analyze this ratio because they typically do not have access to information on the firm's payments to suppliers. Therefore, they cannot accurately assess the firm's ability to meet its short-term obligations.

Which of the Following Ratios Is Difficult for Creditors of a Firm