6/15/25, 12:11 AM D775 OA GUIDE
WGU D775 OA GUIDE ANSWERS | 2025
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WGU D775 OA GUIDE
137 Correct terms
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quick ratio cash ratio average collection period
turnover 1 / 4
6/15/25, 12:11 AM D775 OA GUIDE
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Types of activity ratios Types of financial ratios
Types of leverage ratios Types of liquidity ratios
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Term
Why should a company prefer to use a quick ratio over a current ratio when analyzing liquidity?
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The quick ratio is primarily used to evaluate a company's profitability.The quick ratio includes all liabilities, making it more comprehensive.
The quick ratio focuses solely on long-term assets for liquidity assessment.The quick ratio excludes inventory, providing a more conservative measure.
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Definition
measure the extent of a company's debt relative to its equity. The debt- to-equity (D/E) ratio and debt-to-asset (D/A) ratio can influence decisions about capital structure
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liquidity ratios market ratios
leverage ratios inventory turnover
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Term
leverage
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A company's market share in its industry.
A company's employee turnover rate.
A company's ability to finance debt.A company's total revenue from sales. 3 / 4
6/15/25, 12:11 AM D775 OA GUIDE
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Definition
evaluate how efficiently a firm utilizes its assets to generate sales or revenue.provide insights into the operational performance of the company, indicating how well it manages its overall asset base.
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profitability ratios - aka margin ratios activity ratios - aka efficiency ratios
liquidity ratios - aka solvency ratios debt ratios - aka leverage ratios
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Definition
strong capacity to cover short-term debts, enhancing the firm's creditworthiness and financial stability
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