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:

Himalaya

A major mountain range in Asia, formed by the collision of the Indian and Eurasian tectonic plates.

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Refers to winds that reverse directions depending on the season.

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A local wind that blows from the land to the sea due to higher- pressure air over the land.

Offshore Breeze

A wind that blows from the land towards the sea, typically during the day due to temperature differences.