Firms A and B have the same current ratio,0.75,the same amount of sales,and the same amount of current liabilities.However,Firm A has a higher inventory turnover ratio than B.Therefore,we can conclude that A's quick ratio must be smaller than B's.

Question

Quizplus · Accepted Answer

Firm A has the higher inventory turnover,S/I.So,given the same sales,A must have less inventory.Since the two firms have the same CR,A must have the higher QR,not the lower one.Therefore,the statement is false.

Firms a and B Have the Same Current Ratio,0