If a Company Has a Healthy Current Ratio but a Significantly

question 46

Multiple Choice

If a company has a healthy current ratio but a significantly lower quick ratio,then you can assume that:

• A) the cost of goods sold represents more than half of sales.
• B) current liabilities exceed current assets.
• C) the firm sells only on a cash basis.
• D) inventory represents a large portion of the firm's current assets.

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Definitions:

Evaluating

The process of determining the significance, worth, or condition of something, typically following an analysis of its attributes.

Conditions of Worth

Standards and expectations imposed by others that one feels they must meet to be valued and accepted.

Good Grades

Academic evaluations symbolizing above-average or excellent achievement in educational assignments or tests.

Self-Worth

The sense of one's own value or worth as a person; a critical aspect of one's self-esteem.