General hospital has a current ratio of 0.5. Which of the following actions would improve (increase) this ratio? (Hint: Create a simple balance sheet that has a current ratio of 0.5. Then, judge how the transactions below would affect the balance sheet. ) 1.Use cash to pay off current liabilities 2.Collect some of the current accounts receivable 3.Use cash to pay off some long term debt. 4 . Purchase additional inventory on credit (i.e., accounts payable). 5.Sell some of the existing inventory at cost (book value). b. Now assume that General Hospital has a current ratio of 1.2.In this situation which of the above actions would improve this ratio?
General hospital has a current ratio of 0.5. Which of the following actions would improve (increase) this ratio? (Hint: Create a simple balance sheet that has a current ratio of 0.5. Then, judge how the transactions below would affect the balance sheet. ) 1.Use cash to pay off current liabilities 2.Collect some of the current accounts receivable 3.Use cash to pay off some long term debt. 4 . Purchase additional inventory on credit (i.e., accounts payable). 5.Sell some of the existing inventory at cost (book value). b. Now assume that General Hospital has a current ratio of 1.2.In this situation which of the above actions would improve this ratio?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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General hospital has a current ratio of 0.5. Which of the following actions would improve (increase) this ratio? (Hint: Create a simple
1.Use cash to pay off current liabilities 2.Collect some of the current accounts receivable 3.Use cash to pay off some long term debt. 4 . Purchase additional inventory on credit (i.e., accounts payable). 5.Sell some of the existing inventory at cost (book value). b. Now assume that General Hospital has a current ratio of 1.2.In this situation which of the above actions would improve this ratio?
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