An Increase in the Current Ratio Would Indicate an Increase

question 34

Multiple Choice

An increase in the current ratio would indicate an increase in

• A) leverage.
• B) liquidity.
• C) return on investment.
• D) operating income.

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Definitions:

Dividends Paid Per Share

The amount of dividend that a company pays out to its shareholders for each share owned.

Retained Earnings

The portion of a company's profits that are kept or retained and not paid out as dividends to shareholders, often used for reinvestment in the business, to pay down debt, or to reserve for future use.

Dividends

Disbursements from profits made by a corporation to its shareholders.

Interest Expense

The cost incurred by an entity for borrowed funds, which is considered an operating expense.