Two Firms Have the Same Current Ratio, 0

question 17

True/False

Two firms have the same current ratio, 0.75, and the same amount of sales. However, Firm A has a higher inventory turnover ratio than Firm B. Therefore, we can conclude that the quick ratio of Firm A will be smaller than that of Firm B.

---

Definitions:

Use

Use refers to the act of employing something or someone for a particular purpose.

Exceeding Authority

Acting beyond or exceeding the powers or rights officially granted to an individual or body.

Negotiator

A person or entity that engages in discussions with one or more parties to reach a mutually acceptable agreement or resolution.

Caution

The practice of being careful, or avoiding potential problems or dangers.