Anna has just reviewed a number of indicators of financial control for her firm.One that worries her indicates that the company may soon have trouble making loan payments and clearing its current accounts receivables.In this case,Anna is concerned about the ________ ratio.
A)profit and loss
B)profitability
C)leverage
D)net working capital
E)return on investment

Question

Quizplus · Accepted Answer

The net working capital ratio measures the ability of a company to meet its current financial obligations, including current accounts receivables and loan payments. A low net working capital ratio indicates that a company may soon have trouble meeting these obligations, which is a cause for concern. Therefore, Anna's worry is related to the net working capital ratio.

Anna Has Just Reviewed a Number of Indicators of Financial