If a Firm's Inventory Ratio Increases, What Will Happen to the Firm's

question 109

Multiple Choice

If a firm's inventory ratio increases, what will happen to the firm's cash cycle?

• A)It will increase.
• B)It will decrease.
• C)It will increase and then slowly decrease back to the initial level.
• D)It will decrease and the slowly increase back to the initial level.

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Definitions:

Schedule

A plan that outlines tasks, activities, or events, including their intended start and finish times, in a structured sequence.

Current Ratio

A financial metric indicating how well a company can fulfill its immediate liabilities, using the formula of dividing its current assets by its current liabilities, specifically for debts due within one year.

Account Balances

The amounts of money present in an account at a particular moment, reflecting all transactions.

Long-term Notes Payable

Loans or credit lines that are to be repaid over a period longer than one year.