Consider each of the following situations independently of each other. For each of the situations provide one example of when the underlying circumstances may be such that the observed trend is unfavorable and one example of when the underlying circumstances are favorable.

a. Current ratio increases from one period to the next
b. Accounts receivable turnover increases from one period to the next
c. Accounts payable turnover increases from one period to the next

Question

Consider each of the following situations independently of each other. For each of the situations provide one example of when the underlying circumstances may be such that the observed trend is unfavorable and one example of when the underlying circumstances are favorable.

a. Current ratio increases from one period to the next
b. Accounts receivable turnover increases from one period to the next
c. Accounts payable turnover increases from one period to the next

Quizplus · Accepted Answer

The Answer of Consider each of the following situations independently of each other. For each of the situations provide one example of when the underlying circumstances may be such that the observed trend is unfavorable and one example of when the underlying circumstances are favorable.

a. Current ratio increases from one period to the next
b. Accounts receivable turnover increases from one period to the next
c. Accounts payable turnover increases from one period to the next

Consider Each of the Following Situations Independently of Each Other