Chavez Chocolates Had a Quick Ratio of 1

question 93

Multiple Choice

Chavez Chocolates had a quick ratio of 1.74 at year-end 2009.Which of the following would cause the ratio to decrease during 2010?

• A)A decrease in both cash and marketable securities.
• B)An increase in both cash and marketable securities.
• C)An increase in current assets that exceeded the increase in current liabilities.
• D)Current assets as a percentage of total assets increased while current liabilities as a percentage of total liabilities and stockholders' equity decreased.

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Definitions:

Trading Costs

Expenses associated with buying and selling securities, including brokerage fees, commissions, and taxes.

Market Rate of Return

The overall or average return on investment that investors expect from participating in the financial markets.

Transaction

A transaction is an executed agreement or exchange between parties, often involving the sale, purchase, or trade of goods, services, or financial assets.

BAT Model

A theoretical model; if specifically undefined or not commonly known outside of a narrow context, clarification may be needed.