A Company's Current Ratio Is 0

question 59

Multiple Choice

A company's current ratio is 0.5. Everything else held constant, which of the following actions would increase the company's current ratio?

• A) Borrow using short-term notes payable and use the cash to increase inventories.
• B) Use cash to reduce accruals.
• C) Use cash to reduce accounts payable.
• D) Use cash to reduce short-term notes payable.