A Firm Has a Current Ratio of 1; in Order

question 100

Multiple Choice

A firm has a current ratio of 1; in order to improve its liquidity ratios, this firm might

• A) improve its collection practices and pay accounts payable, thereby decreasing current liabilities and increasing the current and quick ratios.
• B) increase inventory, thereby increasing current assets and the current and quick ratios.
• C) decrease current liabilities by utilizing more long-term debt, thereby increasing the current and quick ratios.
• D) improve its collection practices, thereby increasing cash and increasing its current and quick ratios.

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Definitions:

Psychic Energy

Theoretical construct in psychology that represents the power or drive behind human thoughts, feelings, and behaviors.

Libido

A term primarily used in psychoanalytic theory to denote the sexual energy or drive within human beings.

Sexual Energy

The life force, libido, or creative power in psychoanalytic theory that drives sexual attraction and physical, emotional, and spiritual health.

Artistic Creativity

The ability to produce original and unusual ideas, or to make something new or imaginative.