If a Company Wants to Increase Its Quick Ratio, It

question 110

Multiple Choice

If a company wants to increase its quick ratio, it should consider:

• A) buying equipment on account.
• B) paying off long-term notes.
• C) issuing bonds payable.
• D) collecting an accounts receivable.

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Definitions:

Capital Intensity Ratio

A measure of how much capital is required to produce one unit of output, indicating the extent of capital employed in production.

Net Fixed Assets

The value of a company's property, plant, and equipment minus depreciation, representing the actual worth of these assets to the business.

Total Assets

The sum of all current and long-term assets owned by a company, reflecting the total resources at its disposal.

Internal Growth Rate

The maximum growth rate a company can achieve with its existing assets without having to finance growth with external equity or debt.