Firms a and B Have the Same Current Ratio, 0

question 37

True/False

Firms A and B have the same current ratio, 0.75, the same amount of sales and cost of goods sold, and the same amount of current liabilities.However, Firm A has a higher inventory turnover ratio than B.Therefore, we can conclude that A's quick ratio must be smaller than B's.

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Definitions:

Rapid Speed

Quick or swift pace, often used to refer to the rate at which something happens or changes.

Effortlessly Understands

Indicates the ability to grasp concepts, situations, or instructions easily and without apparent effort.

Atkinson-Shiffrin Model

A theory of memory formation that describes a sequential process involving sensory memory, short-term memory, and long-term memory.

Implicit Memories

Memories that are not part of our consciousness, forming without intentional learning or conscious thought, such as procedural memory for tasks.