If the Only Information You Were Given About Ryan Corporation

question 61

Multiple Choice

If the only information you were given about Ryan Corporation, a large public company in business for many years, was that had a current ratio of 2.9, what could you determine from this?

• A) Nothing, you would also need Ryan Corporation's current ratios from the last few years and the current ratio's from the last few years of Ryan's competitors.
• B) You could determine that Ryan has a liquidity problem because Ryan's current ratio is greater than 2 which is the rule of thumb for the current ratio.
• C) Nothing, you would also need the current ratio's from the last few years of the S&P 500 Index.
• D) You could determine that Ryan has an activity problem because Ryan's current ratio is greater than 2 which is the rule of thumb for the current ratio.

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Definitions:

Positive Correlation

A relationship between two variables where an increase in one variable is associated with an increase in the other variable.

Independent Variable

In an experiment, a factor or condition that is deliberately manipulated to determine whether it causes any change in another behavior or condition.

Coefficient of Correlation

A statistical measure that calculates the strength and direction of a linear relationship between two variables, ranging from -1 to 1.

Independent Variable

The factor in an experiment that is deliberately manipulated to observe its effect on a dependent variable.