Question 10 All these statements are True except: Current ratios indicate short term debt paying...
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Question 10 All these statements are True except: Current ratios indicate short term debt paying ability of a firm. The return on operating asset is the product of the net operating profit margin and the operating asset turnover. The asset Turnover is Total assets divided by equity The difference between operating return on asset and the effective interest rate after tax is called the spread. To compute the quick ratio, trade receivables are not included in current assets
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