1. Which one of the following relationships is correct?
a. Equity multiplier = 1 - Debt-equity ratio
b. Total asset turnover = 1 + Capital intensity ratio
c. Inventory turnover = Sales / Average inventory
d. Return on equity = Return on assets × Equity multiplier
2. A firm has $900 millions of current assets, including $300 millions of inventory. It has $500 millions of current liabilities. What's the firm's current ratio?
a. 0.60
b. 1.20
c. 1.40
d. 1.80