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[p 125-132] The current ratio: Ip 125-132] Most of the following statements are true of the profit margin ratio. Which statement is FALSE regarding the profit margin ratio? O Helps to evaluate a company's ability to pay its short-term (current) liabilities Is sometimes called return on sales Is used to measure a company's long-term profitability O It reflects the percent of profit in each dollar of net sales d Is used to measure the relation between assets and long-term debt O It measures the risk that the firm cannot pay its short-term obligations. O Measures how quickly a company is selling its It is calculated by dividing net income by net sales inventory Critical thinking and p 125-132] Clara's Construction has current assets of $5,000 and noncurrent assets of $10,000, It also has current liabilities of $12,000 and long-term liabilities of $28,000. What amounts will Clara use to calculate the Current ratio? p 117-128 and critical thinking ] Most of the following statements are true. Which statement is FALSE? O Profit margin ratio reflects the amount of profit in each dollar of net sales. O $5,000 and $10,000 O $12,000 and $28,000. O $10,000 and $12,000 O $5,000 and $12,000 Current ratio reflects a company's ability to repay its long-term debt A six-month note payable is a current liability O Current ratio is computed as current assets divided by current liabilities

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