A firm has a current ratio of 1.4 and a quick ratio of .9.Given this, you know for certain that the firm:
A)pays cash for its inventory.
B)has more than half its current assets invested in inventory.
C)has more cash than inventory.
D)has more current liabilities than it does current assets.
E)has positive net working capital.

Question

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The Answer of A firm has a current ratio of 1.4 and a quick ratio of .9.Given this, you know for certain that the firm:
A)pays cash for its inventory.
B)has more than half its current assets invested in inventory.
C)has more cash than inventory.
D)has more current liabilities than it does current assets.
E)has positive net working capital.

A Firm Has a Current Ratio of 1