Many Companies Have to Monitor Some of Their Financial Statement

question 101

Essay

Many companies have to monitor some of their financial statement ratios, such as the current ratio, due to debt covenants. Selected transactions are provided below for a company that uses a perpetual inventory system; sells its merchandise at a selling price that exceeds cost; and had a current ratio of 1.85 before the event occurred. Required:
In the above table, indicate whether each transaction would increase (+), decrease (-), or not affect (0) the company's working capital and the current ratio.

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Definitions:

Consistent

Acting or done in the same way over time, especially to maintain fairness or accuracy.

Ineffective Health Maintenance

An individual's inability to manage and sustain health-promoting practices and routines.

Blood Pressure

The force exerted by circulating blood on the walls of blood vessels, a critical indicator of cardiovascular health.

Medication

Substances used in the diagnosis, treatment, or prevention of diseases, usually comprising prescribed or over-the-counter drugs.