Which of the following activities will increase a firm's current ratio? sale of inventory for a...
Which of the following activities will increase a firm's current ratio?
-
sale of inventory for a profit
-
buy equipment with a long-term bank loan
-
pay the current month’s rent
Homework Answers
Current ratio is current assets divided by current liabilities. By selling inventory for profit, a firm receives additional cash than that it invested in the inventory; cash is current asset. By buying equipment with a long-term bank loan, the long-term liability of a firm increases and the firm has to pay principal and or interest every month which is current liability. Paying the current month's rent is a current liability.
So, from the above, we notice that a firm's current ratio increases by sale of inventory for a profit.
Add Answer to:
Which of the following activities will increase a firm's current
ratio?
sale of inventory for a...
A firm has a current ratio of 1. To increase that ratio the firm might ________....
A firm has a current ratio of 1. To increase that ratio the firm might ________. A. issue bonds and use the proceeds to purchase new equipment B.hold lower cash balances at the bank and increase holdings of interest−earning marketable securities C. develop a better inventory management system so the firm doesn't have to hold as many items in inventory at one time D.take out a long−term bank loan and simultaneously offer customers better credit terms, allowing them to pay...
Which one of the following will increase the current ratio but not the quick ratio? O...
Which one of the following will increase the current ratio but not the quick ratio? O increase in inventory O decrease in cash O increase in accounts payable decrease in accounts receivable Welcome Inn has total equity of $471.000 and a debt-equity ratio of .54. What is the firm's equity multiplier? O 1.54 O 1.40 ○ .46 O 185 The debt-equity ratio is equal to which one of the following? O Equity multiplier + 1 O Long-term debt / Total...
2A.1 What effect would the following actions have on a firm's current ratio? Assume that net...
2A.1 What effect would the following actions have on a firm's current ratio? Assume that net working capital is positive. a. Inventory is purchased for cash b. A supplier is paid. c. A bank loan is repaid. d. A long-term debt matures and is paid. e. A customer pays off an account. Inventory is sold.
Required: 1. Calculate the following six (6) ratios: Current Ratio, Quick Ratio, Receivables Turnover Ratio, Inventory...
Required: 1. Calculate the following six (6) ratios: Current Ratio, Quick Ratio, Receivables Turnover Ratio, Inventory Turnover Ratio, Profit Margin Ratio and Debt to Assets Ratio. Be sure to show the actual calculation as well as your final answer You are only required to calculate the ratios for 2017, however, for two of the ratios (Receivables Turnover Ratio and Inventory Turnover Ratio), you will need data from 2016 for the formula When calculating the Quick Ratio, please note that Short-Term...
1. Return on Assets measures a firm's: a. profitable use of its assets b. use...
1. Return on Assets measures a firm's: a. profitable use of its assets b. use of financial leverage c. return on shareholders investment d. profitability of sales e. cost effectiveness of its operating activities 2. The Current ratio of a firm is 1.3, If the firm uses cash to pay short-term notes-payable, would the transaction increase or decrease the current ratio and Return on Asset ratio? 3. Which of the following could cause return on equity to increase, all...
Other things held constant, which of the following will not affect the quick ratio? (Assume that...
Other things held constant, which of the following will not affect the quick ratio? (Assume that current assets equal current liabilities.) and why? Fixed assets are sold for cash Cash is used to purchase inventories cash is used to pay off accounts payable Accounts receivable are collected Long-Term debt is issued to payoff a short-term bank loan.
Financing activities include: Select one O a. The purchase and sale of long-term assets. o b....
Financing activities include: Select one O a. The purchase and sale of long-term assets. o b. Take a loan from the bank O c. Primary operations such as selling goods to customers d. Pay salary to employees
1. Which of the following sections of the statement of cash flows include activities that increase...
1. Which of the following sections of the statement of cash flows include activities that increase and decrease long-term liabilities and stockholders' equity? A) the investing section B) the non-cash investing and financing section C) the financing section D) the operating section 2. Walker Corp. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: Walker Corp. Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Increase/degrease Cash...
QUESTION 10 Which of the following actions will improve the current ratio? O a. Take a...
QUESTION 10 Which of the following actions will improve the current ratio? O a. Take a nine-month loan from the bank to pay off some of its suppliers b. Accelerate the collection of accounts receivable c. Sell off some old equipment d. All of these
A firm's long-term assets = $100,000, total assets = $400,000, inventory = $50,000 and current liabilities...
A firm's long-term assets = $100,000, total assets = $400,000, inventory = $50,000 and current liabilities = $200,000. The industry average current ratio is 2.0 and quick ratio is 1.5. (3 points each) 7.1 What are the firm's current ratio and quick ratio? 7.2 What is the firm's liquidity position? 7.3 What is the firm's net working capital? 7.4 Why is working capital important to a business?
Which one of the following will increase the current ratio but not the quick ratio? O increase in inventory O decrease in cash O increase in accounts payable decrease in accounts receivable Welcome Inn has total equity of $471.000 and a debt-equity ratio of .54. What is the firm's equity multiplier? O 1.54 O 1.40 ○ .46 O 185 The debt-equity ratio is equal to which one of the following? O Equity multiplier + 1 O Long-term debt / Total...
2A.1 What effect would the following actions have on a firm's current ratio? Assume that net working capital is positive. a. Inventory is purchased for cash b. A supplier is paid. c. A bank loan is repaid. d. A long-term debt matures and is paid. e. A customer pays off an account. Inventory is sold.
Required: 1. Calculate the following six (6) ratios: Current Ratio, Quick Ratio, Receivables Turnover Ratio, Inventory Turnover Ratio, Profit Margin Ratio and Debt to Assets Ratio. Be sure to show the actual calculation as well as your final answer You are only required to calculate the ratios for 2017, however, for two of the ratios (Receivables Turnover Ratio and Inventory Turnover Ratio), you will need data from 2016 for the formula When calculating the Quick Ratio, please note that Short-Term...
Financing activities include: Select one O a. The purchase and sale of long-term assets. o b. Take a loan from the bank O c. Primary operations such as selling goods to customers d. Pay salary to employees
1. Which of the following sections of the statement of cash flows include activities that increase and decrease long-term liabilities and stockholders' equity? A) the investing section B) the non-cash investing and financing section C) the financing section D) the operating section 2. Walker Corp. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: Walker Corp. Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Increase/degrease Cash...
QUESTION 10 Which of the following actions will improve the current ratio? O a. Take a nine-month loan from the bank to pay off some of its suppliers b. Accelerate the collection of accounts receivable c. Sell off some old equipment d. All of these
A firm's long-term assets = $100,000, total assets = $400,000, inventory = $50,000 and current liabilities = $200,000. The industry average current ratio is 2.0 and quick ratio is 1.5. (3 points each) 7.1 What are the firm's current ratio and quick ratio? 7.2 What is the firm's liquidity position? 7.3 What is the firm's net working capital? 7.4 Why is working capital important to a business?
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago