If a firm uses cash to purchase inventory, its quick ratio will increase.

Name: If a firm uses cash to purchase inventory, its quick ratio will increase.
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Question

Quizplus · Accepted Answer

Purchasing inventory with cash decreases current assets (by reducing cash) without affecting current liabilities, thus lowering the quick ratio, which measures a company's ability to meet short-term obligations with its most liquid assets.

If a Firm Uses Cash to Purchase Inventory, Its Quick