An Increase in Current Liabilities Will Have Which One of the Following

question 74

Multiple Choice

An increase in current liabilities will have which one of the following effects, all else held constant? Assume all ratios have positive values.

• A) Increase in the cash ratio
• B) Increase in the net working capital to total assets ratio
• C) Decrease in the quick ratio
• D) Decrease in the cash coverage ratio
• E) Increase in the current ratio

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Definitions:

Production Technology

The methods, equipment, and processes used to produce goods or services, influencing efficiency and output quality.

Demand Curve

A graph depicting the relationship between the price of a good or service and the quantity demanded for a given period.

Marginal Cost

The amount spent to manufacture one more unit of a product or service.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to produce and sell.