4. International Appliances has a current ratio of 1.2. Which of the following actions would improve (increase) this ratio? a. Use cash to pay off current liabilities. b. Collect some of the current accounts receivable. c. Use cash to pay off some long-term debt. d. Purchase additional inventory on credit (accounts payable). e. Use cash to pay for some fixed assets.
4. International Appliances has a current ratio of 1.2. Which of the following actions would improve (increase) this ratio? a. Use cash to pay off current liabilities. b. Collect some of the current accounts receivable. c. Use cash to pay off some long-term debt. d. Purchase additional inventory on credit (accounts payable). e. Use cash to pay for some fixed assets.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 20MCQ
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
Transcribed Image Text:4. International Appliances has a current ratio of 1.2. Which of the following actions would improve (increase) this
ratio?
a. Use cash to pay off current liabilities.
b. Collect some of the current accounts receivable.
c. Use cash to pay off some long-term debt.
d. Purchase additional inventory on credit (accounts payable).
e. Use cash to pay for some fixed assets.
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