Which of the following statements is the most reasonable conclusion from the given information below of ABC Company? Current assets: P465,000 Current liabilities: P130,000 Inventories: P270,000 Quick ratio: 1.5x Industry average: 2.1x Other businesses in the same industry have fewer inventories. The information is insufficient to make any conclusions. ABC Company cannot pay its current liabilities Below industry average quick ratio might be due to cash tied up to large amounts of inventory.

Which of the following statements is the most reasonable conclusion from the given information below of ABC Company? Current assets: P465,000 Current liabilities: P130,000 Inventories: P270,000 Quick ratio: 1.5x Industry average: 2.1x Other businesses in the same industry have fewer inventories. The information is insufficient to make any conclusions. ABC Company cannot pay its current liabilities Below industry average quick ratio might be due to cash tied up to large amounts of inventory.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter14: Completing A Quality Audit

Section: Chapter Questions

Problem 24CYBK

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