Which One of the Following Does NOT Change a Firm's

question 15

Multiple Choice

Which one of the following does NOT change a firm's current ratio?

• A) The firm collects on its accounts receivables.
• B) The firm purchases inventory by taking a short-term loan.
• C) The firm pays down its accounts payables.
• D) None of the above.

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Definitions:

Consolidated Goodwill

An intangible asset that appears when a parent company acquires a subsidiary and is recorded after consolidation processes.

Acquisition Transaction

An acquisition transaction is a business deal in which one company purchases most or all of another company's shares to take control.

Stockholders' Equity Figures

The total value of a company's equity that belongs to shareholders, calculated as total assets minus total liabilities.

Separate Corporate Existence

The legal principle that a corporation exists independently from its owners, with its own rights, liabilities, and obligations.