An Increase in the Current Ratio Implies That the Profitability

question 153

True/False

An increase in the current ratio implies that the profitability of the company has increased from the previous period.

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Definitions:

Capital Investment Project

A project requiring significant amounts of capital for the purchase, improvement, or maintenance of long-term assets to generate future benefits.

Cash Flows

The sum total of currency transactions inbound and outbound in a firm, markedly affecting its cash-on-hand.

Present Values

The today's value of a sum of money or cash flows expected in the future, calculated using a designated return rate.

Payback Period

The payback period is the length of time required to recover the cost of an investment.