A Firm with a Very Low Current Ratio in Comparison

question 189

Multiple Choice

A firm with a very low current ratio in comparison to the industry standard could lower the risk of unavailable short-term funds by moving toward ________ financing strategy.

• A) the aggressive
• B) the conservative
• C) a permanent
• D) a seasonal

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Definitions:

Balance Sheet

A financial statement that displays a company's assets, liabilities, and shareholders' equity at a specific point in time.

LIFO Reserve

A contra-asset for the excess of FIFO over LIFO inventory.

FIFO Costing

An inventory valuation method stating that the oldest inventory items are sold first, with costs of the oldest items being used to calculate profit.

Ending Inventory

The value of goods available for sale at the end of an accounting period.