Over the past year, Free Inc. had an increase in its current ratio and a decline in its total asset turnover ratio. However, its sales, cash, DSO and fixed asset turnover ratio remains constant. What the following statement is correct? Group of answer choices a)Total asset decreases, current asset decreases, and inventory increases b)Total asset increases, current asset increases, and inventory increases c)Total asset increases, current asset decreases, and inventory decreases d)Total asset decreases, current asset increases, inventory increases
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
Over the past year, Free Inc. had an increase in its current ratio and a decline in its total asset turnover ratio. However, its sales, cash, DSO and fixed asset turnover ratio remains constant. What the following statement is correct?
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