How Can a Company Improve Its Current Ratio

question 141

Multiple Choice

How can a company improve its current ratio?

• A) Work with a creditor to reclassify some current debt into long-term debt
• B) Use cash to reduce current liabilities
• C) Nothing can ethically be done to improve the current ratio
• D) Use excess cash to buy new equipment

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Definitions:

Imposing Criminal Penalties

The act of enforcing legal sanctions or punishments for violations of criminal laws.

Long-Arm Statutes

Laws that allow a court to exercise personal jurisdiction over an out-of-state defendant on the basis of certain activities conducted within the state.

International Shoe

A landmark United States Supreme Court case that established the standard for personal jurisdiction over non-resident defendants in civil cases.

Intrastate Business Qualification

The required authorization for a company to conduct business within a particular state’s borders, distinct from its state of incorporation.