Aster Limited Has a Current Ratio of 1

question 29

Multiple Choice

Aster Limited has a current ratio of 1.75 to 1 and current liabilities of $20 000. If Aster Limited's inventory is $8 000 the quick ratio is:

• A) 1.75 to 1
• B) 1.35 to 1
• C) 1.4 to 1
• D) 0.74 to 1

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Definitions:

Consolidation

The process of combining multiple accounts or businesses into a single aggregation for reporting and analysis purposes, or the decrease in a stock's price volatility and the formation of a clear resistance or support level after a significant price movement.

Cyclical Industries

Industries whose performance is heavily influenced by the economic cycle, experiencing higher sales during economic booms and lower sales during recessions.

Sell Government Bonds

The act of disposing of government debt securities in the financial market.

Monetary Authorities

The institutions responsible for regulating a country's money supply and exchange rates, typically a central bank or currency board.