Question

Maria 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, Maria is concerned about the _____ ratio.

A. profit and loss

B. profitability

C. leverage

D. net working capital

E. return on investment

Answer 1

Maria is concerned about the net working capital ratio. This ratio measures a company's ability to meet its short-term financial obligations.

Step-by-step explanation:

Maria is concerned about the net working capital ratio. The net working capital ratio measures a company's ability to meet its short-term financial obligations. It is calculated by subtracting current liabilities from current assets. If the net working capital ratio is low, it suggests that the company may have difficulty paying off its loans and clearing its current accounts receivables.