A firm wants to strengthen its financial position. Which of the following actions would increase its current ratio? 1.b.Reduce the company's days' sales outstanding to the industry average and use the resulting cash savings to purchase plant and equipment. 2.d.Borrow using short-term debt and use the proceeds to repay debt that has a maturity of more than one year. 3.e.Issue new stock and then use some of the proceeds to purchase additional inventory and hold the remainder as cash. 4.a.Use cash to increase inventory holdings. 5.c.Use cash to repurchase some of the company's own stock.

Here in this question, we are required to answer which of the option will increase current ratio.…

Answered: A firm wants to strengthen its…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Bulldogs inc. will least likely experience which of the following if the firm shifts its credit terms from n/25 to 3/10, n/25 a. the computed days sales outstanding will decrease b. the percentage of credit sales from the total sales revenue will increase c. cash conversion cycle will tend to increase d. decrease in short-term borrowings
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