Selected Data from the Financial Statements Are Provided Below

question 162

Multiple Choice

Selected data from the financial statements are provided below:
Refer to Rainsoft Company

-Refer to Rainsoft Company. Which of the following statements is true regarding the company's liquidity?

• A)Based on the current ratio and operating cash flow ratio, the company appears to be in a worse position to pay its current obligations at the end of 2015 compared to 2014.
• B)The quick ratio decreased from 2014 to 2015.
• C)The operating cash flow ratio increased from 2014 to 2015.
• D)Based on the quick ratio and cash ratio, the company appears to be in a better position to pay its current obligations at the end of 2015 compared to 2014.

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Definitions:

Customer

An individual or business that purchases goods or services from a company.

Retailer

A business or individual that sells goods or services directly to consumers, acting as the final link in the supply chain.

In-Transit Merge

Logistics strategy where goods from different suppliers are combined into a single shipment en route to the customer to reduce handling costs and improve efficiency.

Drop-Shipping

A retail fulfillment method where a store doesn't keep the products it sells in stock but instead transfers the customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer.