a firm's current ratio exceeds 1.0, what happens as a result of paying cash to reduce accounts payable? net working capital increases current ratio decreases current ratio increases net working capital decreases

a firm's current ratio exceeds 1.0, what happens as a result of paying cash to reduce accounts payable? net working capital increases current ratio decreases current ratio increases net working capital decreases

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 12QTD

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Question

If a firm's current ratio exceeds 1.0, what happens as a result of paying cash to reduce accounts payable?

net working capital increases
current ratio decreases
current ratio increases
net working capital decreases

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