Gator Corporation Currently Has a Current Ratio Equal to 0

question 10

Multiple Choice

Gator Corporation currently has a current ratio equal to 0.65.If Gator Corporation increases current assets and current liabilities by the same amount, what will happen to their current ratio?

• A)Increase
• B)Decrease
• C)Stay the same
• D)Change, but more information is required to determine the direction of the change.
• E)None of the above.

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Definitions:

Trademark

A symbol, word, or words legally registered or established by use as representing a company or product.

Goodwill

An intangible asset that arises when a buyer acquires an existing business, representing the value of the business's brand, customer base, and other non-physical assets.

Land Improvements

Upgrades made to land such as landscaping, irrigation systems, and construction of pathways that enhance its value and utility.

Buildings

Structures constructed on land that serve various purposes, such as commercial, residential, or industrial activities, often considered as long-term assets in financial accounting.