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:

Identification Theory

A concept in psychology which describes how children assume the characteristics of the same-sex parent by identifying with them.

Behaviorism

A theory in psychology that focuses on observable behaviors and disregards unobservable mental processes.

Morals

Principles or beliefs concerning right and wrong behavior.

Rapport Talk

The language of conversation and a way of establishing connections and negotiating relationships; more characteristic of females than of males.