Which of the Following Statements Is CORRECT

question 51

Multiple Choice

Which of the following statements is CORRECT?

• A)A reduction in inventories would have no effect on the current ratio.
• B)An increase in inventories would have no effect on the current ratio.
• C)If a firm increases its sales while holding its inventories constant, then, other things held constant, its inventory turnover ratio will increase.
• D)A reduction in the inventory turnover ratio will generally lead to an increase in the ROE.
• E)If a firm increases its sales while holding its inventories constant, then, other things held constant, its fixed assets turnover ratio will decline.

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Definitions:

Researcher's Interpretations

The conclusions or explanations made by researchers based on their findings from studies, which are subject to academic scrutiny and debate.

Measurements

The process of obtaining quantitative data or the magnitude of something using standard units.

Experimental Groups

Groups in scientific research that receive the intervention or treatment being tested, as opposed to a control group which does not.

Control Groups

In experimental research, groups of participants who do not receive the experimental treatment, used as a benchmark to measure the effects of the treatment.