If a Firm's Current Ratio Exceeds 1

question 79

Multiple Choice

If a firm's current ratio exceeds 1.0, what happens as a result of paying cash to reduce accounts payable?

• A) Net working capital increases.
• B) Net working capital decreases.
• C) Current ratio increases.
• D)Current ratio decreases.

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Definitions:

Fetal Pulmonary Trunk

A vessel in the developing fetus that carries blood from the right ventricle of the heart to the lungs.

Ligamentum Arteriosum

A small ligament that is the remnant of the ductus arteriosus formed within three weeks after birth, connecting the pulmonary artery to the proximal descending aorta.

Fetal Aorta

The primary artery in the fetus that carries oxygenated blood from the heart to various parts of the body, evolving from the embryonic heart.

Axillary Artery

A major blood vessel that carries oxygenated blood to the lateral aspect of the thorax, the axilla (armpit), and the upper limb.