If a Company Has a Current Ratio of 1

question 54

Short Answer

If a company has a current ratio of 1.2:1, what respective effects will the borrowing of cash by short-term debt and collection of accounts receivable have on the ratio? $\begin{array}{lc}&\text { Short-term Borrowing } & \text { Collection of Receivables } \\\hline a.& \text { Increase } & \text { No effect } \\b.&\text { Increase } & \text { Increase } \\c.&\text { Decrease } & \text { No effect } \\d.&\text { Decrease } & \text { Decrease }\end{array}$

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Definitions:

Work Hours

The scheduled hours during which an employee is expected to perform work duties.

Productivity Levels

Measures of output or efficiency indicating how effectively resources are utilized in producing goods or services.

Juniority Provisions

Clauses in employment agreements or policies that determine benefits and status based on an employee's length of service or tenure.

Layoffs

The involuntary termination of employees, often due to financial constraints, downsizing, or restructuring within an organization.