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