A firm with a current ratio equal to four will have its current ratio increase if both current assets and current liabilities increase by the same amount.

Name: A firm with a current ratio equal to four will have its current ratio increase if both current assets and current liabilities increase by the same amount.
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Question

Quizplus · Accepted Answer

If both current assets and current liabilities increase by the same amount, the current ratio will decrease because the ratio of current assets to current liabilities will be closer to 1.

A Firm with a Current Ratio Equal to Four Will