Which of the following activities will increase a firm s current ratio? Purchase

Question

Which of the following activities will increase a firm s current ratio? Purchase inventory using cash. Buy equipment with a short-term bank loan. Accounts receivable are pad in cash. Accrued wages and taxes increase. None of these statements will increase a firm s current ratio. A firm may not want to strive to match industry average ratios when: They are a leader in the industry. Firms in the industry are shifting into different directions. Many of the competitor firms are foreign. All of the above. Which of the following will increase a firm's quick ratio assuming no other accounts change? A reduction in accounts payable. An increase in accounts receivable. An increase in inventory. All of these statements will increase a firm's quick ratio. Which of the following statements is correct? If a firm has a very high fixed asset turnover, it means that the firm may be nearing its maximum production capacity. An extremely low average collection period will maximize net income. In general, a firm should strive for a high average payment period because it wants to pay for its purchases as quickly as possible. All of the statements above are correct. Common-size financial statements: Allow for an easy comparison of balance sheets and income statements across firms in the industry. Provide quantitative clues about the direction that the firm is moving. Are obtained by dividing all income statement accounts by net sales and al balance sheet accounts by total assets. All of the above. The main two sources of the time value of money are: Inflation and Interest Rates Inflation and timing of Consumption Interest Rates and Risk Risk and timing of Consumption

Explanation / Answer

B,B,C,D,A,D

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