A Quick Ratio That Is Much Smaller Than the Current

question 160

Multiple Choice

A quick ratio that is much smaller than the current ratio indicates that

• A) inventories represent a large portion of current assets.
• B) the company has a low inventory turnover.
• C) inventories represent a small portion of current assets.
• D) the company has a high inventory turnover.

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Definitions:

Concise

Expressing or covering much in few words; brief in form but comprehensive in scope.

Manipulation

involves influencing or controlling someone or something to one's advantage, often without their knowledge or consent.

Truthfulness

The quality of being honest, accurate, and straightforward in communication or behavior; paramount in building trust and credibility.

Honesty

The quality of being truthful, transparent, and free from deceit or falsehood.