Lincoln Industries' current ratio is 0.5. Considered alone, which of the following actions would increase the company's current ratio? a. Borrow using short-term notes payable and use the cash to increase inventories. b. Use cash to reduce short-term notes payable. c. Use cash to reduce accruals. d. Use cash to reduce long-term bonds outstanding. e. Use cash to reduce accounts payable.
Lincoln Industries' current ratio is 0.5. Considered alone, which of the following actions would increase the company's current ratio? a. Borrow using short-term notes payable and use the cash to increase inventories. b. Use cash to reduce short-term notes payable. c. Use cash to reduce accruals. d. Use cash to reduce long-term bonds outstanding. e. Use cash to reduce accounts payable.
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
Problem 1PS
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Question
Lincoln Industries' current ratio is 0.5. Considered alone, which of the following actions would increase the company's current ratio?
| a. |
Borrow using short-term notes payable and use the cash to increase inventories.
|
|
| b. |
Use cash to reduce short-term notes payable.
|
|
| c. |
Use cash to reduce accruals.
|
|
| d. |
Use cash to reduce long-term bonds outstanding.
|
|
| e. |
Use cash to reduce accounts payable.
|
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