If a Company's Current Ratio Increases from 1

question 20

Multiple Choice

If a company's current ratio increases from 1.2 to 1.4 from one year to the next, and its quick ratio decreases from 0.2 to 0.15 over the same time period, this indicates:

• A) company's liquidity must have increased
• B) accounts receivable have decreased
• C) inventory management should be further examined
• D) current liabilities have decreased

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