Selected Data from the Financial Statements Are Provided Below

question 109

Multiple Choice

Selected data from the financial statements are provided below:

-Refer to Rainsoft Company. Which of the following statements is true regarding the company's liquidity?

• A)Based on the current ratio and operating cash flow ratio, the company appears to be in a worse position to pay its current obligations at the end of 2021 compared to 2020.
• B)The quick ratio decreased from 2020 to 2021.
• C)The operating cash flow ratio increased from 2020 to 2021.
• D)Based on the quick ratio and cash ratio, the company appears to be in a better position to pay its current obligations at the end of 2021 compared to 2020.

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Definitions:

Hierarchies

Systems or organizations in which members are ranked one above the other according to status or authority.

Free Market System

An economic system based on supply and demand with minimal government intervention, where prices for goods and services are determined freely by the open market.

Cluster

A group of similar things or people positioned or occurring closely together, often used to refer to a statistical analysis method that identifies groups of similar data points.

Wants and Needs

Desires (wants) are wishes or aspirations not necessary for survival, whereas needs are essential for basic human survival.