Martin Company Has a Cash Ratio of 0

question 90

Multiple Choice

Martin Company has a cash ratio of 0.3.This implies that the company ________.

• A) has an unnecessarily large amount of cash supply
• B) is not sending a strong message to investors and creditors that it has the ability to repay its short-term debt
• C) is not in a position to meet its long-term obligations
• D) has no liquidity issues

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Definitions:

Elba

An island in the Mediterranean Sea off the coast of Tuscany, Italy, famous as the first place of exile for Napoleon Bonaparte in 1814.

Continental System

An economic blockade imposed by Napoleon between 1806 and 1814, aiming to weaken Britain by prohibiting European countries from trading with it.

Continental Markets

Markets that are primarily located on the European continent, often used in contrast with the British or other island markets.

Britain's Economy

Refers to the economic system and performance of the United Kingdom, characterized by its service sector, manufacturing, and international trade.