If a Firm Has a High Current Ratio but a Low

question 127

Multiple Choice

If a firm has a high current ratio but a low acid-test ratio,one can conclude which of the following?

• A) The firm has a large outstanding accounts receivable balance.
• B) The firm has a large investment in inventory.
• C) The firm has a large amount of current liabilities.
• D) The firm's financial leverage is very high.

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