Doran Corp

question 32

Multiple Choice

Doran Corp.has a current ratio of 6.Under which of the following scenarios might this indicate a problem?

• A) inventories are increasing due to the introduction of a new product
• B) the company is holding cash in expectation of making a large investment in equipment
• C) receivables are increasing due to increasing sales
• D) inventories are increasing and the industry in which Doran Corp.operates is experiencing a recession

---

Definitions:

Money Supply

The full amount of financial resources at an economy's disposal, including cash, coins, and the amounts in checking and savings accounts, at a particular moment.

Financial Intermediaries

Organizations that facilitate the channeling of funds between savers and borrowers, including banks, credit unions, and insurance companies.

Welfare Banks

Financial institutions focused on providing services and support to individuals in need, though not a widely recognized term in traditional finance.

Credit Unions

Member-owned financial cooperatives that provide savings, credit, and other financial services to their members.