For Several Years, Flame Corporation Has Had a Current Ratio

question 84

Multiple Choice

For several years, Flame Corporation has had a current ratio that was consistent with other companies in its industry.For the most recent year, Flame's current ratio was significantly higher than that for the industry.What is the best possible explanation for this situation?

• A)The other companies in the industry were not as profitable.
• B)Flame's liquidity has improved or is not leveraging financial resources effectively.
• C)Flame has less property, plant and equipment than other companies.
• D)Flame has too much debt.

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Definitions:

Guthrie

Edwin Ray Guthrie was a psychologist known for his associationist theories of learning, emphasizing the contiguity principle.

Hull

A reference to Clark L. Hull, an influential psychologist known for his work on drive theory and behaviorism.

Estes

Pertains to the work of William K. Estes, an American psychologist known for his research in mathematical psychology, learning theory, and memory processes.

Thorndike

Edward Thorndike was an American psychologist whose work on animal behavior and the learning process led to the theory of connectionism and helped lay the scientific foundation for modern educational psychology.