CVA Exam Dumps | A single rule of thumb that, for example, a satisfactory ratio is 2.0:1 is not widely followed in determining

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Question 181/251

A single rule of thumb that, for example, a satisfactory ratio is 2.0:1 is not widely followed in determining the current ratio, because of vastly different conditions typical in various industries, such as accounts receivable and collection periods and inventory turnover periods. As with most ratios, the adequacy of the current ratios for the given company can be better gauged by:

A. Percentage of sales and total assets

B. Comparison with a market leader than by comparison with any absolute standard

C. Comparison with a market leader than by comparison with industry norms

D. Comparison with industry norms than by comparison with any absolute standard

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Question 181/251

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