Question

1. Asset utilization ratios

Group of answer choices

relate balance sheet assets to income statement sales.

are most important to stockholders.

measure the firm's ability to generate a profit on sales.

measure how much cash is available for reinvestment into current assets.

2. Long-term funds may be used by a financial manger to cover short-term needs and protect against the danger of not being able to provide adequate short-term financing during tight money periods.

True/False

Answer 1

1) Relates balance sheet assets to income statement sales.

asset utilisation ratio means the total revenues earned by investing into the total assets of the company.

2)TRUE.

Long term financing means the long term funds are used to finance the short needs, when the short term finance/funds are not available in the market and use the long term funds for short term purpose during the tight periods of shortage of money.

If you have any doubts please comment on the answer.