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:

Newspapers

Printed publications consisting of folded unstapled sheets and containing news, articles, advertisements, and other information.

Federal Government

The national government of the United States, formed by the Constitution, which divides power between the executive, legislative, and judicial branches.

Bankrupt

A legal status for individuals or entities that cannot repay the debts they owe to creditors, leading to legal processes to address these outstanding debts.

Alien and Sedition Acts

A series of laws passed in 1798 that permitted the deportation of foreigners deemed dangerous and criminalized making false statements against the federal government.