Engineering Economics
Each financial ratio is generally compared by

A ratio of some selected firms most progressive and successful at the point of consideration
A past ratio calculated from the past financial standard of the firm
All of these
A ratio developed by using the projected financial statement of the firm

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Engineering Economics
Liquidity ratios are used:

To compare short term obligations to short-term resources available to meet these obligations
To measure a firm’s ability to meet short-cut obligations
All of these
To obtain much insight into the present cash solvency of the firm and the firm

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