a . Is computed by dividing net credit sales for the accounting period by the cash realizable value of accounts receivable on the last day of the accounting period . b . Can be used to compute the average collection period . c . Is a method of evaluating the solvency of net accounts receivable . d . Is only important to internal users of accounting information . 11 . A measure of a company ’ s solvency is the a . acid-test ratio . b . current ratio . c . times interest earned ratio . d . asset turnover ratio . 12 . The times interest earned ratio is computed by dividing a . net income by interest expense . b . income before income taxes by interest expense . c . income before interest expense by interest expense . d . income before interest expense and income taxes by interest expense . 13 . The 2007 financial statements of Shadow Co . contain the following selected data ( in millions ). Current Assets $ 75 Total Assets 120 Current Liabilities 40 Total Liabilities 85 Cash 8 Interest Expense 5 Income Taxes 10 Net Income 16 The debt to total assets ratio is a . 70.8 % b . 53.3 % c . 1.41 % d . 6.2 times 14 . The statement " Bond prices vary inversely with changes in the market rate of interest " means that if the a . market rate of interest increases , the contractual interest rate will decrease .